FOREIGN: UK UNEMPLOYMENT HITS HIGHEST LEVEL SINCE 2021 AMID TAX, TARIFF PRESSURES

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By: Sefiu Ajape

Britain’s unemployment rate has risen to its highest point in nearly three years, reaching 4.6% in the three months leading up to April, according to data released by the Office for National Statistics (ONS) on Tuesday.

This marks a slight increase from the 4.5% recorded in the first quarter of the year. The ONS noted that the uptick comes as UK businesses face mounting challenges, including a recent increase in business taxes introduced in the Labour government’s first budget last October.

Compounding the pressure, a 10% baseline tariff imposed by US President Donald Trump on British and other foreign imports came into effect in April, adding strain to the already impacted economy.

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“There continues to be weakening in the labour market, with the number of people on payroll falling notably,” said ONS director of economic statistics Liz McKeown.

“Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.”

Analysts said the data, which included slowing growth to wages, would likely see the Bank of England continue to cut interest rates into 2026, weighing on the pound but lifting London’s stock market in early trade on Tuesday.

“With payrolls falling, the unemployment rate climbing, and wage growth easing, today’s labour market release leaves us more confident in our view that the Bank of England will cut interest rates further than investors expect, to 3.50 percent next year,” noted Ruth Gregory, deputy chief UK economist at Capital Economics research group.

The Bank of England last trimmed borrowing costs in May, by a quarter point to 4.25 percent.