UK pay growth slows as jobless rate rises to highest since 2021

Pay growth in Britain slowed sharply and unemployment rose to its highest in nearly four years in the three months to April, official data showed on Tuesday, potentially making the Bank of England less cautious about cutting interest rates further.

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Wage growth excluding bonuses slowed to 5.2 per cent, its weakest since the three months to September and down more than expected from 5.5 per cent in January to March this year. The jobless rate rose to 4.6 per cent from 4.5 per cent, its highest since the three months to May 2021, the Office for National Statistics said.

The April data was the first since employers were hit by a 25 billion pound ($34 billion) rise in social security contributions which came into force at the start of the month, as well as a 6.7 per cent increase in the minimum wage.

The downturn appeared to gather pace in May, according to separate tax office data which showed a slump of 109,000 in the number of employees on company payrolls, the most since May 2020 at the height of the COVID-19 pandemic.