London, July 17 Britain's job market continued to see recession, with unemployment rate and job vacancies rising to new highs over years due to labour cost hikes, data from the Office for National Statistics (ONS) showed Thursday.
The country's unemployment rate for people aged 16 years and over stood at 4.7 per cent in the March-May period of 2025, registering increase both year on year and quarter by quarter, according to the ONS. The figure also reached the highest level in around four years.
From March to May, the number of payrolled employees fell 0.3 per cent year on year and was 0.2 per cent lower from the previous quarter.
During the April-June period, The number of job vacancies fell 56,000 to 727,000, marking the 36th consecutive period where vacancy numbers have dropped compared with the previous quarter, the data showed, Xinhua news agency reported.
The ONS data suggests that the jobs market is continuing to loosen as unemployment rises, vacancies fall again, and wage growth slows, said Jane Gratton, Deputy Director of Public Policy at the British Chambers of Commerce. She also noted that pay rises are still outpacing inflation, and employment costs pressure is continuing to erode firms' operating margins.
The ONS said some firms may not be recruiting new workers, or replacing workers who have left based on the feedback of its survey. Analysts argued that April's rise in employer national insurance contributions (NICs) has discouraged firms from hiring.
The weakening trend of employment "reflects businesses' reactions to rising costs and an uncertain external environment. Many firms are choosing to operate leaner in response to the current situation -- we can see that in private sector temporary work outperforming other forms of hiring right now as firms seek flexibility," said Neil Carberry, Chief Executive of the Recruitment and Employment Confederation.
Research from British Chambers of Commerce showed that recruitment remains challenging, and businesses cite labour costs as the biggest pressure.
"The mounting financial pressure, alongside pervasive skills shortages, remains a massive challenge for business, presenting big risks to investment and productivity," said Gratton, adding that companies want to see real-world progress on the government's economic strategies, movement on global trade talks and no further tax rises to restore business confidence.
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