UK unemployment rate rises and vacancies fall as jobs market falters

The UK’s unemployment rate has risen and vacancies have fallen for the ninth month in a row, official figures have shown.

The rate of unemployment in the UK rose to 3.8% in the three months leading up to February, according to the Office for National Statistics (ONS).

This was up from 3.7% in the previous three months.

Most economists had expected the rate to remain unchanged.

The ONS said this reflects “uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment”.

But the figures also showed a rise in employment – to 75.8% in the three months to February from 75.7% in the previous three months – as more people returned to the jobs market in the face of the cost-of-living crisis.

The statistics body said the number of job vacancies have fallen by 47,000 to 1.1 million in the three months to March, but remains high, especially in the teaching sector.

Economics Editor Joel Hills reports on the latest figures from the Office for National Statistics

As the cost of living crisis continues, people are seeing their pay grow slower than prices, with total pay including bonuses down by 4.1% when Consumer Prices Index inflation is taken into account.

This means their earnings are still falling in real terms, despite a 5.9% rise in earnings, according to the ONS

Chancellor Jeremy Hunt said: “While unemployment remains close to historic lows, rising prices continue to eat into pay cheques which is why halving inflation this year is one of our top economic priorities.

“To help families in the meantime, we are making work pay with a record increase in the National Living Wage, while providing cost of living support worth an average of £3,300 per household this year and last, funded through windfall taxes on energy profits.”

Darren Morgan, director of economic statistics at the ONS, said: “With the number of people neither working nor looking for a job down again, there were rises in both those in work and those actively looking for a job.

“However, while the group outside the labour market – termed ‘economically inactive’ – fell, the number among them who were long-term sick rose to a new record high.

“The number of days lost to strikes picked up again in February, after January’s sharp fall, albeit not to the levels seen before Christmas.

“Once again education was the most affected sector, accounting for over three-fifths of the total.”

The figures also showed there were 348,000 working days lost to strikes in February, up from 210,000 in January 2023, with more than three-fifths of the due to industrial action across the education sector.

The number of people off work due to long-term sickness rose to another all-time high, at 2.5 million – up 3.7% quarter-on-quarter and 7.5% year-on-year and the highest since records began in 1993.

But the overall rate of inactivity eased back to 21.1% in the quarter to February, down from 21.3% in previous three months as more young people returned to work amid the cost-of-living crisis.

ITV News Economics Editor Joel Hills says encouragingly, the number of “economically active” people is growing, despite unemployment rate rising

This helped lift the number of people in employment by 169,000 quarter-on-quarter to 33 million in the three months to February.

The figures also showed there were 49,000 more unemployed people across the UK at 1.3 million in the three months to February.

Employment minister Guy Opperman said the latest jobs figures are “encouraging”.

“I remain focused on supporting those on the lowest incomes to progress in work and build a steady and sustainable future,” he said.

But Labour has said Britain is "real wages down, families worse off, hundreds of thousands fewer people in work and our economy lagging".

Rachel Reeves, Labour’s shadow chancellor, said: “Thirteen years of the Tories and all we have is a gaping hole where their plan for growth should be and a cost-of-living crisis that continues to damage family finances."

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