UK unemployment rate unchanged but job vacancies drop and redundancies increase

The rate of UK unemployment remains unchanged, the latest figures show, but there are further signs of cracks in the jobs market with a fall in vacancies and an increase in redundancies.

The Office for National Statistics (ONS) said the rate of unemployment stood at 3.7% in the three months to January, unchanged from the previous three months.

There was a 51,000 drop in the number of job vacancies to 1.2 million, while the redundancy rate edged higher.

It said the fall in vacancies “reflects uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment”.

Data also revealed that a record number of people were completely out of the jobs market due to long-term sickness.

In January, there were 220,000 days lost to strike action in January, down from 822,000 in December, with schools the hardest hit.

The data comes ahead of the Spring Budget on Wednesday, when Chancellor Jeremy Hunt is expected to announce ways to encourage older workers back into the jobs market to help with the UK’s shrinking workforce.

The latest figures revealed that pay remained under pressure despite declining inflation, while the data showed that wage growth has eased back sharply.

The ONS said total wages including bonuses lifted by 5.7% in the three months to January, with regular wages, excluding bonuses, increasing by 6.5%.

This was lower than the 6% growth for total pay and 6.7% for regular pay seen in the previous quarter.

With Consumer Prices Index (CPI) inflation taken into account, real regular pay fell by 3.5% and total pay including bonuses was 4.4% lower.

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To know... 

Mr Hunt said: “The jobs market remains strong, but inflation remains too high.

“To help people’s wages go further, we need to stick to our plan to halve inflation this year.

“Tomorrow at the Budget, I will set out how we will go further to bear down on inflation, reduce debt and grow the economy, including by helping more people back into work.”

Darren Morgan, director of economic statistics at the Office for National Statistics, said: “Recent trends have continued, with a slight rise in employment, especially among part-timers.

“Detailed figures from our business surveys also show record numbers of jobs in several sectors, including law and accountancy firms, health, and pubs and restaurants."

He added: “The number of people neither working nor looking for a job fell overall, driven by a drop in young people.

“However, a record number of people were completely outside the labour market due to long-term sickness."

“Although the inflation rate has come down a little, it’s still outstripping earnings growth, meaning real pay continues to fall.”

He added: “The number of working days lost to strikes fell in January from the very high level seen in December. Nevertheless, many days were still lost, with education the most affected sector.”

Labour’s Shadow Work and Pensions Secretary Jonathan Ashworth said: “The Tories’ abject failure to support people back to work means there are 234,000 fewer people in employment than before the pandemic.

“While other major economies have bounced back, Britain is languishing under the Tories – and families are paying the price."