The UK unemployment rate has gone up while the number of job vacancies has fallen to its lowest level in five years, according to the latest figures from the Office for National Statistics (ONS).
The unemployment rate rose to 5% in the three months to March from 4.9% in the three months to February. The number of job openings fell by 28,000, or 3.9%, to 705,000 between February and April, its lowest level since April 2021.
According to the ONS, the number of people on payrolls in April also fell. Payroll employment figures dropped by 100,000 last month. 
Patrick Milnes, Head of Policy for People and Work at the British Chambers of Commerce, said: “With unemployment at 5%, the expectation is that it will rise this year as business uncertainty grows amid the UK’s political unrest and the Iran War. Our latest forecast expects it to increase to 5.5%.
“A further drop in vacancies, now at their lowest outside the pandemic for more than a decade, suggests businesses are pausing recruitment. This is unsurprising as labour costs remain a key concern.
“But with the conflict in Iran likely to drive higher inflation later in the year, as unemployment also rises and growth remains weak, the possibility of stagflation is very real.
“To counter this the government must set out a pro-growth agenda which capitalises on the UK’s economic strengths. While AI could boost productivity, its impact on young people entering the job market is a worry, given the further rise in the number of economically inactive people aged 18-24.
“Firms are also alarmed over plans to remove the lower National Minimum Wage level for 18-21 year olds. This could deter them from employing young adults and place upward pressure on all wage scales.
“Further action to ease the cost burdens firms face is needed, such as changes to electricity bill levies and reform of business rates. These would also go a long way to boosting confidence.”
More detail on the labour market data can be found here.
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