The UK’s jobs market is progressively deteriorating, with the unemployment rate rising, redundancies increasing, and open vacancies creeping up only marginally.
The UK unemployment rate climbed to 5.1% in the three months to November, marking an increase both quarterly and annually, to the highest level since 2021.
The latest figures paint a picture of a labour market in flux. Job vacancies edged up by 10,000 to reach 734,000 in the quarter to December, yet remain 8.6% lower than a year earlier.
Redundancies have accelerated, rising to 4.9 per 1,000 employees across both quarterly and annual comparisons.
Wage growth presents a stark contrast between nominal and real terms. Pay excluding bonuses increased 4.5% year-on-year, whilst total earnings including bonuses rose 4.7%.
“Unemployment has been climbing fairly steadily for the past three years and has hit 5.1%. It’s a substantial rise since the most recent low of 3.6% in summer 2022 and only just shy of the pandemic peak of 5.3%. And while pay growth looks robust for those still in work, things aren’t quite as strong as they seem,” said Sarah Coles, head of personal finance, Hargreaves Lansdown.
“On the face of it, it’s not all bad news: employment is up over the year, jobs vacancies have risen very slightly over the month, and wages are up 4.7% in a year. However, look a bit closer and real weakness emerges. Vacancies are down 8.6% in a year, while unemployment and redundancies are rising. As a result, there were 2.5 unemployed people per vacancy – up from 2.4 in the previous quarter and 1.9 a year ago. Meanwhile, wages are up just 1.1% after inflation – and this is likely to fall.”