UK unemployment rate rises to 3.9% as company payrolls shrink – business live

It may sound odd that unemployment and employment could both rise in a quarter, as they did in January-March.

But this graph shows how it happened: more people stopped being economically inactive, and either moved into jobs or were registered as out of work:

The minister for employment, Guy Opperman MP says there are signs of progress in today’s labour force data:

“We’re continuing to see progress in the labour market as we take action across government to grow the economy. Employment is up; economic inactivity is down; and vacancies have fallen in successive quarters.

“As well as helping deliver on our priority to grow the economy, we know that being in work remains the best way for people to get on in life. That’s why I’m focused on matching jobseekers with roles, and businesses with a resilient and skilled workforce. Through partnerships with local employers, we have thousands of placements in sectors such as banking and engineering, helping people to achieve new qualifications and build rewarding careers.”

Chancellor the Exchequer Jeremy Hunt (who has been trying to chivvy the over-50s back into work), says:

“It’s encouraging that the unemployment rate remains historically low but difficulty in finding staff and rising prices are a worry for many families and businesses.

That’s why we must stick to our plan to halve inflation and help families with the cost of living, while delivering our childcare reforms and supporting older people and disabled people who want to work.”

Hunt is correct that a 3.9% jobless rate is historically low. But, the unemployment rate has been rising since last summer – it was just 3.5% in June-August 2022, the lowest since 1974.

Vodafone to cut 11,000 jobs worldwide

Mark Sweney

The troubled mobile operator giant Vodafone is to cut 11,000 jobs from its global workforce over the next three years.

The company, which has seen its share price slump to a two-decade low, said it needed to restructure its business to compete against rivals and improve the experience for its tens of millions of customers.

The job cuts, which follow the announcement in November of a €1bn (£870m) cost savings plan, mark the first big move by the new group chief executive, Margherita Della Valle.

“Today I am announcing my plans for Vodafone,” said former finance chief Della Valle, who was appointed chief executive last month.

“Our performance has not been good enough. To consistently deliver, Vodafone must change.”

More here:

Here’s ONS director of economic statistics Darren Morgan to explain today’s UK labour market report report:

“Employment and unemployment both rose again in the first three months of 2023, driven in particular by men. This means the number of those neither working nor looking for work continues to fall, although the number of people not working due to long-term sickness rose again, to a new record.

“However, the number of people on employers’ payrolls fell in April for the first time in over two years, though this is an early estimate that could be revised later.

“Despite continued growth in pay, people’s average earnings are still being outstripped by rising prices.

“The number of days lost to strikes rose again in March, with education and health making up four-fifths of the total this month.

UK workers continued to be hit by falling real wages, with earnings continuing to lag behind rising prices.

Average total pay, including bonuses, rose by 5.8% per year in the January-March quarter.

Regular pay (excluding bonuses) rose to 6.7%, up from 6.6%.

Average regular pay growth for the private sector was 7.0% and for the public sector was 5.6% in January to March 2023. A larger rise for public sector pay was last seen in August to October 2003 (5.7%), the ONS says.

However, CPI inflation was 10.1% in March, so real wages are still falling.

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 chief executive 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,

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

• 7am BST: UK labur market report

• 9.30am BST: Government hosts Food Summit

• 10am BST: ZEW economic sentiment index

• 10.30am BST: Business & Trade Committee quiz the Competitions and Markets Authority

• 1.30pm BST: US retail sales for April