UK unemployment rate holds steady in May

(Sharecast News) - The UK unemployment rate held steady in May, official data showed on Monday, although other indicators continued to point to a softening jobs market. According to the Office for National Statistics, the UK unemployment rate was 4.9% in March to May, unchanged on the previous month and marginally below forecasts for 5.0%.

However, the number of vacancies fell over the quarter - albeit by less than in recent periods - while private sector wage growth slowed

Including bonuses, total earnings rose 4.3% in March to May, or by 3.4% once the extra payments were stripped out. On an annual basis, public sector regular earnings sparked 5.5%. But in the private sector, annual wage growth slowed to 2.9%, the first time since 2020 that growth has dipped below 3%.

Liz McKeown, director of economic statistics at the ONS, said: "Vacancies fell again over the quarter, but by less than in recent periods. The latest decrease was driven mainly by smaller businesses, where labour and operating costs were cited as factors in not taking on new staff."

Separately, the ONS also confirmed that public sector net borrowing excluding public sector banks was £16bn in June, down £7.9bn on the same month a year previously and £0.3bn below the Office for Budget Responsibility forecast. The City had been anticipating a smaller decline, to £19.8bn. The figures will provide some early respite for new prime minister Andy Burnham and his chancellor, John Healy.

The ONS attributed the reduction to higher receipts alongside slightly slower expenditure, on the back of lower inflation-linked debt interest costs.

But it acknowledged: "Debt remains high by historical standards and close to the annual value of the entire UK economy."