Rachel Reeves dealt another brutal economic blow as unemployment spikes across UK

Britain's jobless rate has struck its highest level for four years as workers also faced another slowdown in wage growth, official figures have shown. The Office for National Statistics (ONS) said the rate of UK unemployment increased to 4.7% in the three months to May, from 4.6% in three months to April. It said this marked the highest level since June 2021.

Meanwhile, average earnings growth, excluding bonuses, slowed to 5% in the period to May to its lowest level for almost three years. The figures point towards further pressure in the UK labour market, days after the governor of the Bank of England warned that the Bank is prepared to make larger interest rate cuts if it sees that the job market slowing. The figures will come as a bitter blow to Chancellor Rachel Reeves, barely a year after she moved into Number 11 Downing Street.

Helen Whately MP, Shadow Work and Pensions Secretary, wasted little time putting the Government on the defensive, saying: "Unemployment going up for the ninth month in a row on Labour's watch is a disgrace.

"It is the latest in a litany of dreadful economic news - coming off the back of stoked inflation and depressed growth stats.

"These are more than just statistics, each and every job loss is a devastating blow to hardworking families across the country.

"With record taxes already biting, the employment rights bill looming and the prospect of even more painful tax rises to come in the autumn, this is a shock but not a surprise.

"Worse is yet to come under this punishing Labour government."

ONS director of economic statistics Liz McKeown said: "The labour market continues to weaken, with the number of employees on payroll falling again, though revised tax data shows the decline in recent months is less pronounced than previously estimated.

"Pay growth fell again in both cash and real terms, but both measures remain relatively strong by historic standards."

Key points from the ONS data:

• Annual growth in employees' average earnings for both regular earnings (excluding bonuses) and total earnings (including bonuses) was 5.0%
• Annual growth in real terms, adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH), was 1.1% for regular pay and 1.0% for total pay
• Using the Consumer Prices Index excluding owner occupiers' housing costs (CPI) to adjust for inflation, annual growth in real terms was 1.8% for regular pay and 1.7% for total pay
• Annual average regular earnings growth was 5.5% for the public sector and 4.9% for the private sector
• The wholesaling, retailing, hotels and restaurants sector showed the strongest regular annual growth rate

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