The UK is experiencing anaemic economic growth, rising inflation, and a deteriorating jobs outlook, with unemployment reaching 4.7% in May, the highest in four years. Wage growth has slowed for three consecutive months, and hiring rates have decreased. Employers are burdened with rising costs from inflation and tax increases, leading to concerns about job security. Despite these pressures, wage growth remains stable, and redundancy rates have not surged unexpectedly. Business groups are worried about the impact of increased national insurance contributions and higher living wages on job cuts and consumer prices. June figures indicate inflation has risen as employers pass costs to consumers.
Unemployment nudged up to 4.7% in May, hitting the highest level in four years, while wage growth slowed for a third consecutive month, and employers cut back on hiring.
Despite clear pressures, wage growth remains surprisingly resilient and redundancy rates, although elevated, are not rocketing. It is holding quite steady given the circumstances.
Business groups have complained since Rachel Reeves's autumn budget that her 25bn increase in employer national insurance contributions and 6.7% rise in the national living wage would force them to cut jobs.
Figures released on Wednesday showed inflation rose by more than expected in June as firms passed on higher employment costs to the price of restaurant meals, hotel stays and supermarket groceries.
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