Jobless rate rises and vacancies slump to lowest level in five years – ONS

Britain’s rate of unemployment has unexpectedly risen as vacancies slumped to their lowest level for five years amid a sharp pull back in hiring across under-pressure retail and hospitality sectors, according to official figures.

The Office for National Statistics (ONS) said the jobless rate rose to 5% in the three months to March, up from 4.9% in the three months to February.

Most economists had expected the rate to remain unchanged.

The ONS estimated the number of workers on UK payrolls also slumped by 100,000 during April, which is the largest fall since May 2020 at the start of the Covid pandemic, though these figures are subject to revision.

It said vacancies dropped by 28,000 quarter-on-quarter to 705,000 in the three months to April, which is the lowest level since the same period in 2021.

Regular earnings growth meanwhile also fell back further, to 3.4% in the first quarter, down from 3.6% in the three months to February – only just outpacing Consumer Prices Index inflation, by 0.3%.

Liz McKeown, ONS director of economic statistics, said: “Latest figures suggest the labour market remains soft, with vacancies at their lowest level in five years and unemployment higher than a year ago.”

She added: “Lower-paying sectors such as hospitality and retail have seen some of the largest falls in vacancies and payroll numbers, both in recent months and over the last year.”

Work and Pensions Secretary Pat McFadden said unemployment figures are “encouraging” amid the impact of the Iran war on the labour market.

He said: “Today’s figures show there were 416,000 more people in work than there was this time last year. While this is encouraging, we know the conflict in the Middle East is casting a shadow on the labour market.

“However, thanks to the choices we have made, we are in a stronger position to deal with the continuing volatility and costs of the war in Iran with our economy ranking as the fastest growing of any European G7 country last year.

“Boosting opportunity and tackling youth unemployment in every area remains our priority, and through our jobs guarantee we are helping young people into work while engaging employers to ensure they have the skilled workforce that they need.”

Published: 19/05/2026 by Radio NewsHub