UK unemployment rises; competition watchdog plans formal investigation into vet pricing – business live

Tony Wilson, director at the Institute for Employment Studies, said:

Today’s jobs figures show that the labour market remains pretty subdued. The employment rate is broadly flat but still about one percentage point below where it was before the pandemic, even though unemployment has fallen back to where it was.

So as has been the story in previous months, there are fewer people in work because there are more people outside the labour force altogether – not looking or not available for work. In all, there are well over half a million more people out of work than before the pandemic began. This is being driven by more young people and older people outside the labour force, and in particular because of more people reporting long-term health conditions that stop them from working.

In our view this is holding back the recovery as the economy is continuing to create jobs, with nearly a million unfilled vacancies reported today. This reiterates that we need a different approach to how we reach and engage with people who are out of work and may want to come back to work, and in particular our employment services need to be more accessible, inclusive and supportive. Employers need to play their part too, and do more to keep people in work and to open up opportunities for those who may need more support.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Unemployment has gone up in the UK, with the jobless rate unexpectedly rising, while pay growth has slowed, reflecting wider weakness in the economy.

The unemployment rate unexpectedly ticked up to 3.9% in the three months to January from 3.8%, according to the Office for National Statistics, at a time when the economy entered into recession. City economists had expected the rate to remain unchanged.

The number of people claiming jobless benefits increased by 16,800 in February. Employment growth has tailed off, from an increase of 72,000 in the three months to December to a fall of 21,000 in the three months to January.

At the same time, as employers hired more people, the number of job vacancies in the economy declined, by 43,000 to 908,000 in the three months to February. (But they remain more than 100,000 above their pre-pandemic level.)

Average earnings grew by 5.6% between November and January, down from 5.8% in the previous three months. Excluding bonuses, pay growth slowed from 6.2% to 6.1%.

Paul Dales, chief UK economist at Capital Economics, said:

The easing in wage growth in January is probably still a bit too slow for the Bank of England’s liking. But there are encouraging signs that a more marked slowdown is just around the corner and that an interest rate cut in June is possible.

The Bank of England wants to see evidence that wage growth is slowing before cutting borrowing costs.

The chancellor of the exchequer, Jeremy Hunt, said:

Our plan is working. Even with inflation falling, real wages have risen for the seventh month in a row. And take home pay is set for another boost thanks to our cuts to National Insurance which in total are putting over £900 a year back into the average earner’s pocket.

Britain’s competition watchdog plans to launch a formal investigation into vet pricing, as it has multiple concerns, including that pet owners might be overpaying for medicines or prescriptions.

After taking a look at the market for the UK’s 16 million pet owners, the Competition and Markets Authority flagged these concerns:

• Consumers may not be given enough information to enable them to choose the best veterinary practice or the right treatment for their needs.

• Concentrated local markets, in part driven by sector consolidation, may be leading to weak competition in some areas.

• Large corporate groups may have incentives to act in ways which reduce choice and weaken competition.

• Pet owners might be overpaying for medicines or prescriptions.

• The regulatory framework is outdated and may no longer be fit for purpose.

Referring to the watchdog’s concerns, Sarah Cardell, chief executive, said:

These include pet owners finding it difficult to access basic information like price lists and prescription costs – and potentially overpaying for medicines. We are also concerned about weak competition in some areas, driven in part by sector consolidation, and the incentives for large corporate groups to act in ways which may reduce competition and choice.

If it finds the market is not working as it should, the CMA can impose measures such as mandating the provision of certain information to consumers, imposing maximum prescription fees and ordering the sale or disposal of a business or assets.

Most vet practices do not display prices on their website – of those practices checked, over 80% had no pricing information online, even for the most basic services. People are not always informed of the cost of treatment before agreeing to it – around one fifth of respondents to its call for information said that they were not told of the cost before agreeing to tests.

Some vet practices make up to a quarter of their income selling medicines, so there may be little incentive to make pet owners aware of alternatives, the CMA said.

A company can own multiple vet practices in a local area without making that clear. The share of vet practices that belong to large corporate groups has shot up to almost 60% from 10% in 2013.

The CMA has launched a four-week consultation on the proposal to launch a market investigation.

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