Guardian Business
Rolling coverage of the latest economic and financial news Here’s the ONS chart showing the unexpected fall in the UK’s unemployment rate in the three months ended in February – though it does not include the impact of the Iran war, which started at the end of that month. The impact of the war is expected to hurt the labour market in the coming months. The EY Item Club has forecast that unemployment will hit 5.8% by the middle of 2027 , with almost 250,000 more people losing their jobs because of the crisis in the Middle East, pushing the number of jobseekers to more than 2.1 million. Indeed, employment only rose by 24,000 in the three months to February, well below population growth. What’s more, the number of people on payrolls contracted slightly in February. Private sector pay growth ex-bonus also slowed slightly from 3.3% to 3.2%. All this suggests that despite the fall in the headline unemployment rate, the labour market remained weak going into the energy crisis. The provisional data for March suggests the labour market weakened last month. Payrolls dropped by 11,000 and the number of vacancies fell again. The risk is that rising energy prices prompt a big pull back in consumer demand while simultaneously pushing up input costs for businesses, which would push the unemployment rate even higher. We now think the unemployment rate will probably peak at around 5.5%. If energy prices rise higher over the summer as supply becomes even more constricted, the unemployment rate could move towards 6%. Continue reading...
Go to News Site