Britain’s unemployment rate surged to 4.5 percent in the first quarter of 2025, the highest since August 2021, according to the Office for National Statistics (ONS). This marks an increase from 4.4 percent in the three months ending February 2025.
The data, released on Tuesday, reflects the period before the Labour government’s October budget, which introduced a business tax hike in April. It also predates the 10-percent baseline tariff imposed on the UK and other nations by US President Donald Trump last month.
Liz McKeown, ONS director of economic statistics, noted, “The labour market continues to cool, with payroll numbers dropping in the first quarter.” She added that wage growth, while slightly slower, remains robust, with minimal disparity between public and private sectors.
Analysts predict the Bank of England will likely cut interest rates twice more in 2025, following two reductions earlier this year. Ruth Gregory, deputy chief UK economist at Capital Economics, commented, “The jobs market weakened further, but pay growth hasn’t slowed significantly, likely prompting the Bank of England to maintain its quarterly rate cuts.”
Gregory also pointed out that April’s continued decline in employment suggests businesses are cutting jobs in response to higher business taxes and minimum wage increases.
