From January to March this year, the rate of unemployment grew by 0.2% to 4.5%, according to the Office for National Statistics (ONS).
However, the number of workers with second jobs rose to 1.3 million, representing almost 4% of all workers in the UK.
There was also a fall in the estimated number of job vacancies between February and April of 42,000, which brought the overall roles available to 761,000 – the 34th consecutive quarter this has decreased.
Compared to a year ago, there are 131,000 fewer job vacancies on the market – a 14.7% drop. This is also a 4.3% fall from the levels before the pandemic in 2020. Meanwhile, the rate of employment in the UK remained at 75% in the data, which the ONS notes is more accurate following improvements to the Labour Force Survey (LFS) data collection.
Annual growth in total earnings excluding bonuses eased to 5.6% in the three months to the end of March, and the inclusion of bonuses totalled 5.5%. This has been attributed by Bestinvest to the National Insurance hike for employers announced in the Autumn Statement.
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Further, it might be the start of further dips in pay growth in real terms, according to Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners.
‘Pay growth could slow further’
Haine said: “Pay growth could slow further in the coming months as the effects of the Chancellor’s new tax measures on businesses and US President Donald Trump’s tariff policies filter through to company spreadsheets.
“Many people may not feel their wages are going further in real terms either, as frozen income tax thresholds – set to remain in place until at least 2028 – mean they are being drawn deeper into higher rates of tax.
“With inflation expected to tick up in the coming months – a result of the Chancellor’s employment tax hikes as companies pass on rising costs to consumers, as well as the impact of Trump’s tariff war – the outlook for household budgets remains uncertain. Interest rates are easing, but they may not be easing as fast as some might like.
“While the Bank of England lowered the headline interest rate for the second time this year earlier this month, easing wage growth and the prospect of weaker economic growth data for March later this week may not be enough to trigger a third rate cut in June.”
She added: “Rising employment costs have already prompted some businesses to scale back pay rises and hiring this year, with the global uncertainty helping to cement that strategy. In uncertain times, keeping personal finances on track is imperative.”
