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Insider UK
Henry Saker-Clark & Peter A Walker

Wages rise at record rate as unemployment jumps unexpectedly

Britain’s unemployment rate has risen above expectations, while wages increased at the joint-highest rate on record.

The Office for National Statistics (ONS) stated that the UK jobless rate jumped to 4% for the three months to May, from 3.8% in the previous three-month period.

Economists had predicted a reading of 3.8% for the latest quarter.

Meanwhile, average regular wages - not including bonuses - were 7.3% higher in the three months to May, the same as during the previous three months and the joint highest since records began in 2001.

ONS director of economic statistics Darren Morgan said: “Total employment grew in the latest three months while the number of people actively looking for work also increased, both driven by men rejoining the labour market.

“Pay excluding bonuses has again risen at record levels in cash terms.

“Due to high inflation, however, the real value of weekly earnings are still falling, although now at its slowest rate since the end of 2021.”

For March to May, Scotland’s estimated unemployment rate rose slightly to 3.2%.

The estimated employment rate fell over the quarter to 75.1% and the estimated inactivity rate rose to 22.3%.

Separate, seasonally-adjusted HM Revenue and Customs early estimates show 2.44 million payrolled employees in Scotland in June - 24,000 more than a year ago.

Wellbeing Economy Secretary Neil Gray said: “The continued near-record low unemployment rates for those aged 16 and over across Scotland are welcome and reflects the resilience of the labour market amid the challenging economic outlook and ongoing cost of living crisis.

“With industries such as hospitality and agriculture still facing recruitment challenges, however, an urgent reassessment of UK Government immigration policy is necessary to increase access to the international labour and skills that Scotland needs for our economy and communities to prosper.

“With full powers over migration, Scotland could boost its workforce and tackle recruitment challenges, many of which have been caused by the end of free movement and the Brexit imposed on Scotland by the UK Government.”

Chancellor Jeremy Hunt said: “Our jobs market is strong, with unemployment low by historical standards, but we still have around one million job vacancies, pushing up inflation even further.”

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