UK unemployment is rising at the fastest rate among the world’s 38 richest countries, according to analysis by the Trades Union Congress (TUC).
In a report a day before official labor market data is expected to show a further rise in unemployment in Britain, the trade union body looked at data from the Organization for Economic Co-operation and Development (OECD) for the first three months of this year.
It found that of its 38 member states, only Costa Rica suffered a similar increase in the number of people who lost their jobs between the beginning of January and the end of March.
Every region of the UK was hit by rising unemployment and falling job vacancies, the TUC said, illustrating dislocation in the labor market between employers unable to find workers with the right skills and rising unemployment.
Figures from the Office for National Statistics (ONS), due out on Tuesday, are expected to show a further rise in unemployment in recent months, a morning for Rishi Sunak’s report that the economy is growing strongly.
The ONS confirmed last month that the economy had emerged from last year’s recession, growing by 0.6% in the first quarter of the year, and surveys of business people show rising levels of confidence about economic growth prospects. Consumer confidence has also risen this year in response to rising levels of average disposable income.
However, employers have indicated that they are looking to reduce staff numbers despite the recovery. Separate research by the Chartered Institute of Management (CMI) found that in the first three months of this year, more UK employers were preparing plans for redundancy roles and hiring freezes than in the same period last year.
A CMI survey of almost 1,000 UK managers found that 35% of organizations planned to either freeze (21%) or reduce (14%) recruitment in the next six months. In the same period last year, the total was 24%, while in the summer of 2022 it was just 15%, indicating an increasing trend in the number of employers looking to reduce or reduce staff numbers.
When asked about the reasons for the decision to freeze or cut back on hiring, three in five managers (60%) blamed deteriorating revenue or rising costs, while 55% cited organizational restructuring to reduce costs and 34% said it was due to increased economic uncertainty. .
One in five managers also cited higher employee salaries (19%), a smaller number (13%) then increased use of digital technologies and automation as the reason for reducing the number of employees.
Public sector employers were more likely to say they planned to reduce staff numbers, with three-quarters citing budget cuts as the main reason.
The research will add to concerns among some Bank of England policymakers about the weak long-term economic outlook. The central bank’s monetary committee will consider whether to cut interest rates from the current level of 5.25% at its meeting later this month.
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In its latest labor market report last month, the ONS reported a falling number of job vacancies across the country, falling by 26,000 to 898,000 in the three months to April.
TUC general secretary Paul Nowak said the weak jobs data from the ONS and its analysis showed “how out of touch Rishi Sunak and his government are – and that complacency is costing Britain dear”, adding: “The Prime Minister’s economic bluster is frankly laughable.” “
The OECD, which counts the US, France, Germany, Australia and Japan among its members, urged policymakers to invest in workers’ skills to boost employment after many people left the labor market during the Covid-19 pandemic, often due to ill health.
The Conservative Party’s election manifesto, due to be published on Tuesday, will reportedly include measures which Sunak will claim will save £12bn on benefits by the end of the next parliament by bringing back or keeping workers in the workforce.