UK Unemployment Rising Fastest Among OECD Countries, Analysis Shows

The UK is experiencing the fastest rise in unemployment among the 38 richest countries, according to a new analysis by the Trades Union Congress (TUC). This comes a day before official labour market figures are expected to confirm another increase in joblessness in Britain.

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The TUC examined data from the Organisation for Economic Cooperation and Development (OECD) covering the first three months of this year. The findings revealed that, apart from Costa Rica, the UK saw the highest rise in unemployment during this period.

Every region in the UK has been affected by the increase in unemployment and the decrease in job vacancies. This situation highlights a disconnect in the labour market where employers are struggling to find workers with the right skills amid rising joblessness.

The Office for National Statistics (ONS) is set to publish new unemployment figures, which are anticipated to show a further rise in recent months. This could undermine Prime Minister Rishi Sunak’s claims of robust economic growth.

Last month, the ONS reported that the UK economy had exited last year’s recession, growing by 0.6% in the first quarter. Business leader surveys have shown rising confidence in economic growth, and consumer confidence has increased due to higher average disposable incomes.

Despite these positive signs, employers are planning to reduce their workforce. Research by the Chartered Institute of Management (CMI) found that more UK employers were preparing for redundancies and hiring freezes in the first quarter of this year compared to the same period last year.

The CMI survey of nearly 1,000 British managers revealed that 35% of organizations planned to either freeze (21%) or reduce (14%) recruitment in the next six months. This is a significant increase from 24% last year and 15% in the summer of 2022.

When asked about the reasons for freezing or reducing recruitment, 60% of managers cited worsening revenues or rising costs, 55% pointed to organizational restructuring to cut costs, and 34% mentioned increased economic uncertainty. Additionally, 19% attributed the decision to higher staff pay, and 13% to the increased use of digital technology and automation.

Public sector employers were more likely to plan staff reductions, with three-quarters attributing this to budget cuts.

The research has heightened concerns among some Bank of England policymakers about the long-term economic outlook. The central bank’s monetary policy committee will meet later this month to discuss whether to lower interest rates from the current level of 5.25%.

In its recent labour market report, the ONS noted a decline in job vacancies across the country, with a drop of 26,000 to 898,000 in the three months leading up to April.

TUC general secretary Paul Nowak criticized the government, stating that the ONS figures and TUC analysis highlight “just how out of touch Rishi Sunak and his government are – and this complacency is costing Britain dear.” He added, “The prime minister’s economic boasts are frankly laughable.”

The OECD, which includes countries like the US, France, Germany, Australia, and Japan, has urged politicians to invest in workforce skills to boost employment. Many workers left the labour market during the Covid-19 pandemic due to ill health, and the organization emphasizes the need for skills investment to address this issue.

Written by Influencer Editorial Team

Managed By Influencer Team - United Kingdom

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