News

UK Unemployment Data

UK Unemployment has risen for the first time since mid-2015. Experts are questioning if this is linked to economic uncertainty ahead of the EU referendum.

The latest figures from the Office of National Statistics (ONS) show UK unemployment has risen to 1.7 million for the period December 2015 to February 2016. Earnings, including bonuses, rose by 1.8% which is a slower increase than that of the prior three-months, 2.1% (1).

A spokesman for ONS commented “It’s too soon to be certain, but with unemployment up for the first time since mid-2015 – and employment seeing its slowest rise since that period – it’s possible that recent improvements in the labour market may be easing off” (1).

Of those unemployed it was found that 961,000 people had been unemployed and seeking work for up to six months, a 31,000 increase compared to a year earlier. However, the number seeking work for longer than six months has decreased by 172,000 compared to a year earlier (2).

The work and pensions secretary has speculated that the recent increase in unemployment could be linked to economic uncertainty ahead of the EU referendum saying, “There will be companies right now today who have been looking at major investments into the UK who are hanging back and considering whether that’s the right thing to do. So of course that will have an impact. “Now, I’m not saying that the increase of 21,000 in unemployment is as a direct result of that, but it’s an example of the kind of really gritty questions that those people who say Britain should leave the single market need to respond to” (3).

Some economists support the notion that uncertainty over the outcome of the referendum may be deterring employers from taking on new staff and delaying hiring till after the public vote on 23rd June (1).

Other experts have proposed that the economic slowdown impacting manufacturing and construction is a more significant cause of the recent increase in unemployment (4).

  1. http://www.bbc.co.uk/news/business-36090124
  2. https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/april2016#unemployment
  3. http://www.independent.co.uk/news/business/news/uk-unemployment-rises-by-21000-to-17m-ons-says-a6992341.html
  4. http://www.theguardian.com/business/2016/apr/20/uk-unemployment-rises-and-pay-growth-falls