Unemployment in the UK is increasing at the fastest rate among 38 of the world’s wealthiest countries, according to an analysis by the Trades Union Congress (TUC). This comes ahead of official labor market figures expected to show a further rise in joblessness.
The TUC’s examination of data from the Organisation for Economic Cooperation and Development (OECD) for the first quarter of this year revealed that only Costa Rica experienced a comparable surge in job losses between January and March. Every UK region has been affected by rising unemployment and a decline in job vacancies, highlighting a mismatch between employer needs and available skills.
Last month, the Office for National Statistics (ONS) reported that the economy had exited last year’s recession, posting a 0.6% growth in the first quarter. Despite rising business confidence and improved consumer sentiment driven by higher disposable incomes, employers are still looking to cut jobs.
Research from the Chartered Institute of Management (CMI) showed that more UK employers were planning redundancies and hiring freezes in the first three months of this year compared to the same period last year. The survey of nearly 1,000 managers indicated that 35% of organizations intended to either freeze (21%) or reduce (14%) recruitment over the next six months, up from a combined 24% last year and just 15% in summer 2022.
Managers cited several reasons for these decisions: 60% pointed to declining revenues or rising costs, 55% to organizational restructuring, and 34% to increased economic uncertainty. Additionally, 19% blamed higher staff pay, and 13% cited greater use of digital technology and automation. Public sector employers, in particular, noted budget cuts as a primary reason for reducing staff. The latest ONS labor market report showed a drop in job vacancies, falling by 26,000 to 898,000 in the three months leading to April.
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