Key events
The number of people out of work, and economically inactive because of long-term sickness increased to a record high in the last quarter, today’s jobs report shows.
Introduction: UK unemployment rate rises, as payroll numbers fall
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The UK’s unemployment rate has risen, with companies shedding workers as the jobs market cools, and more people look for work.
Figures just released by the Office for National Statistics show that the UK’s jobless rate rose to 3.9% in the January-March quarter, up from 3.8% a month earlier.
The increase in unemployment was largely driven by people unemployed for over 12 months, the ONS says.
More timely data shows that firms cut their payrolls by 136,000 in April, to 29.8 million.
This is the first fall in total payrolled employees since February 2021, the ONS says (adding that the data may be revised next month).
A sign that the economy has lost momentum, with higher interest rates weighing on demand.
In another sign that the labour market is weakening, the number of vacancies fell by 55,000 on the quarter to 1,083,000 in February-April.
The ONS says:
Vacancies fell on the quarter for the 10th consecutive period and reflect uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment.
But, there has also been a notable move of people back into the labour market – either finding work, or looking for it. This has pulled the UK’s economic inactivity rate down by 0.4 percentage points on the quarter, to 21.0% in January to March.
The ONS says:
The decrease in economic inactivity during the latest three-month period was largely driven by people aged 16 to 24 years. Looking at economic inactivity by reason, the quarterly decrease was largely driven by those inactive because they are students or inactive for other reasons
Flows estimates show that, between October to December 2022 and January to March 2023, there has been a record high net flow out of economic inactivity. This was driven by people moving from economic inactivity to employment.
This has also nudged up the UK’s employment rate to 75.9% in January to March 2023, 0.2 percentage points higher than October to December 2022.
The increase in employment over the latest three-month period was driven by part-time employees and self-employed workers, the ONS says.
Also coming up
MPs from the Business & Trade Committee will quiz the leadership of the Competition and Markets Authority (CMA) on their ambitions for the body today.
CMA chair Sarah Cardell and chair Marcus Bokkerink will be quizzed about the regulators interventions in high-profile merger attempts, including Microsoft’s purchase of gaming firm Activision Blizzard.
That deal received the green light from the EU yesterday, with Brussels accepting Microsoft’s concessions on cloud gaming,
The European Commission has required Microsoft to license popular Activision Blizzard games automatically to competing cloud gaming services. This will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.
— Brad Smith (@BradSmi) May 15, 2023
Elsewhere in Westminster, farmers, retailers and others from across the UK food chain will attend a summit to discuss the food crisis at Downing Street today.
The agenda
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7am BST: UK labur market report
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9.30am BST: Government hosts Food Summit
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10am BST: ZEW economic sentiment index
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10.30am BST: Business & Trade Committee quiz the Competitions and Markets Authority
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1.30pm BST: US retail sales for April
