UK unemployment rising fastest among OECD countries

Jun 10, 2024

According to a Trades Union Congress (TUC) analysis, UK unemployment is rising fastest among 38 of the world's richest countries.

All UK regions faced rising unemployment and fewer job vacancies in the first three months of the year, highlighting a mismatch between employers' needs and available skills. Figures from the Office for National Statistics (ONS) are expected to show a further rise in unemployment, challenging Rishi Sunak's claims of robust economic growth.

Although the economy grew by 0.6% in the first quarter, and business and consumer confidence is rising, many employers plan to reduce headcounts. A survey by the Chartered Institute of Management (CMI) revealed that 35% of UK organisations plan to freeze or reduce recruitment in the next six months, up from 24% last year and 15% in the summer of 2022.

Reasons for these plans include worsening revenues or rising costs (60%), organisational restructuring (55%), and economic uncertainty (34%). Higher staff pay and increased automation were also factors. Public sector employers are particularly likely to reduce staff due to budget cuts.

The research will heighten concerns among some Bank of England policymakers regarding the fragility of the long-term economic outlook. The Bank's monetary policy committee will soon decide whether to drop interest rates from their current level of 5.25%. The ONS recently reported a decline in job vacancies by 26,000 to 898,000.

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