Unemployment is rising in the UK at the fastest pace among 38 of the world’s richest countries, according to an analysis by the Trades Union Congress (TUC).
In a release a day before official labour market figures are expected to show another increase in joblessness in Britain, the union body looked at data from the Organisation for Economic Cooperation and Development (OECD) covering the first three months of this year.
It found that of its 38 member states, only Costa Rica suffered a similar rise in the number of people losing their jobs between the start of January and the end of March.
Every region of the UK was affected by rising unemployment and a falling number of job vacancies, the TUC said, illustrating the dislocation in the labour market between employers who cannot find workers with the right skills and rising joblessness.
Figures from the Office for National Statistics (ONS) to be published on Tuesday are expected to show a further rise in unemployment in recent months in a blow to Rishi Sunak’s message that the economy is growing robustly.
The ONS confirmed last month that the economy had exited last year’s recession, growing by 0.6% in the first quarter of the year, and surveys of business leaders show rising levels of confidence about the prospects for economic growth. Consumer confidence has also risen this year in response to a rising level of average disposable incomes.
However, employers have indicated that despite the recovery, they are seeking to reduce their headcount. Separate research by the Chartered Institute of Management (CMI) found that in the first three months of this year, more UK employers were drawing up plans to make roles redundant and impose hiring freezes than in the same period last year.
The CMI survey of just under 1,000 British managers found that 35% of organisations planned to either freeze (21%) or reduce (14%) recruitment in the following six months. In the same period last year the combined total was 24%, while in the summer of 2022 it was just 15%, indicating a rising trend in the number of employers wanting to restrict or cut numbers of staff.
When asked for the reasons behind the decision to freeze or reduce recruitment, three in five managers (60%) blamed worsening revenues or rising costs, while 55% cited organisational restructuring to reduce costs, and 34% said it was due to increased economic uncertainty.
One in five managers also cited higher staff pay (19%) as the reason for reducing the number of employees, with a smaller number (13%) citing the increased use of digital technology and automation.
Public sector employers were more likely to say they were planning to reduce staff numbers, with three-quarters saying budget cuts were the main reason.
The research will add to concerns among some Bank of England policymakers about the weakness of the longer-term economic outlook. The central bank’s monetary policy committee will consider at a meeting later this month whether to bring interest rates down from their current level of 5.25%.
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In its latest labour market release last month, the ONS reported a declining number of job vacancies across the country, falling by 26,000 to 898,000 in the three months to April.
The TUC general secretary, Paul Nowak, said the weak jobs figures from the ONS and its analysis showed “just how out of touch Rishi Sunak and his government are – and this complacency is costing Britain dear”, adding: “The prime minister’s economic boasts are frankly laughable.”
The OECD, which counts the US, France, Germany, Australia and Japan among its members, has urged politicians to invest in workers’ skills to boost employment after many people left the labour market during the Covid-19 pandemic, often as a result of ill health.
The Conservative party election manifesto, due to be published on Tuesday, will reportedly include measures that Sunak will claim will save £12bn in benefits by the end of the next parliament by returning or keeping workers in the labour market.