UK Unemployment Rate Rose to 3.9% 

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Written by: Liez Comendador
UK Unemployment Rate Rose to 3.9%

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The decline in payroll figures showed an increasing unemployment rate to 3.9% for the first time in two years. There are clear indications of reduced demand for labour, as evidenced by a drop of 136,000 employees between March and April.

This decrease in the number of workers on UK employers’ payrolls reflects the impact of the stagnant economy on the country’s job market. The Office for National Statistics has released fresh data revealing a decline of 136,000 employees between March and April, marking the first decrease since February 2021.

While the ONS states that these figures are provisional, payroll numbers serve as the most up-to-date indicator of the job market’s condition, suggesting a cooling off in labour demand. Despite the decline in April, the number of employees on payrolls is still over 800,000 higher than the pre-Covid-19 lockdown levels of February 2020.

Official statistics show an increase in both employment and unemployment rates during the first quarter of 2023. As the cost-of-living crisis impacts household budgets, there has been a record flow of people transitioning from inactivity to employment.

Unemployment rate rose unexpectedly

Three months before April, job vacancies decreased by 55,000, reaching just over 1 million, marking the tenth consecutive quarterly decline. Additionally, the number of individuals inactive due to long-term sickness reached a new record of 2.55 million.

Darren Morgan, the ONS Director of Economic Statistics, stated, “Employment and unemployment both increased during the first quarter of 2023, primarily driven by men. This implies that the number of individuals who are neither working nor seeking work continues to decrease, although the number of people unable to work due to long-term sickness has risen to a new high.”

Despite experiencing the highest pay growth in the public sector in two decades, workers in both the public and private sectors are finding themselves in a more difficult situation because of the rising cost of living surpassing wage increases.

The private sector witnessed an average regular pay growth of 7.0%, while the public sector saw 5.6% between January and March. However, the cost of living rose by 10.1% in the year leading up to March.

During March, the number of lost workdays due to strikes increased from 332,000 in February to 556,000, with 80% of the total attributed to strikes in the health and education sectors. Kitty Ussher, the Chief Economist at the Institute of Directors, remarked, “A combination of high costs and financially strained consumers is causing some businesses to hesitate before hiring, as they remain uncertain about the future.”

Chris Thomas, the Head of the Commission on Health and Prosperity at the Institute for Public Policy Research think tank, commented, “More individuals are now unemployed due to health-related issues than at any other point in history. This starkly highlights the government’s failure to address health concerns. Long-term sickness is significantly undermining our economy and impeding people’s ability to lead long, happy, and prosperous lives.”

Jeremy Hunt, the Chancellor of the Exchequer, described the unemployment rate remaining low at 3.9% despite the 0.1-point increase in the three months leading up to March as “encouraging.”


UK payroll numbers fall as unemployment rate rises to 3.9%. (16 May 2023). Retrieved from The Guardian:

ONS: UK unemployment rate rises to 3.9% – what does this mean for interest rates? (16 May 2023). Retrieved from Money Week:


  • Darren Menzies

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