Britain's unemployment hits 4-year high amid economic downturn, U.S. tariff pressure

The Office for National Statistics (ONS) reported that job vacancies fell by 5.8 percent in the May-July quarter to 718,000, with drops in 16 of the 18 monitored industry sectors.

LONDON, Aug. 13 (Xinhua) -- Britain's labor market showed further signs of cooling in the second quarter, with job vacancies and payrolled employees declining. The unemployment rate stood at 4.7 percent, the highest in four years, official data showed Tuesday.

The Office for National Statistics (ONS) reported that job vacancies fell by 5.8 percent in the May-July quarter to 718,000, with drops in 16 of the 18 monitored industry sectors, led by arts, entertainment, and recreation, down 17.6 percent from the previous quarter.

The number of payroll employees in June was down by 149,000, or 0.5 percent, compared with a year earlier, and by 26,000, or 0.1 percent, from the previous month. Early estimates for July put the figure at 30.3 million.

"The UK's post-pandemic labor market was red hot. But that period is officially over, the labor market is loose and getting looser, having shed 165,000 payrolled jobs over the past eight months," said Hannah Slaughter, senior economist at the Resolution Foundation.

"Taken together, these latest figures point to a continued cooling of the labor market," said Liz McKeown, ONS director of economic statistics.

Stephen Evans, chief executive of the Learning and Work Institute, said the largest job losses were in retail and hospitality. "These sectors also have the strongest pay growth, so it's likely that a weak economy, rising minimum wage, and higher employer costs are impacting jobs," he said.

Experts believed that steady wage growth also contributed to unemployment. Separate surveys showed that wage growth, excluding bonuses, held steady at 5 percent in the three months to June, underscoring the persistent price pressures.

Jane Gratton, deputy director of public policy at the British Chambers of Commerce, said persistent cost pressures, alongside tariffs and other global uncertainties, were limiting job creation, with some businesses holding back recruitment or cutting jobs.

She said inflation could also influence the interest rate decisions of the Bank of England. "Continued wage growth is creating real challenges for business and the wider economy," she noted.

Economists argue that U.S. tariffs are adding to the strain. Matthew Percival, future of work and skills director at the Confederation of British Industry, said that global uncertainty was one of the reasons that explained why firms were much more cautious about creating new jobs or replacing staff.

Professor David Bailey from the University of Birmingham noted that U.S. tariffs were adding pressure to companies' decision-making in terms of recruitment. "While a U.S.-UK trade deal has been reached, tariffs on automotive goods have still risen from 2.5 to 10 percent, impacting exports and margins for major manufacturers like Jaguar Land Rover, which has announced 500 job cuts," he said.

"The impact of tariffs is to slow economic growth globally. The uncertainty itself has had an impact," he added.

David Spencer, a professor with the University of Leeds, told Xinhua that the latest figures meant the British economy was facing sluggish growth and a looser labor market. He warned that higher employment taxes, policy uncertainty, and tariff pressures are limiting employment growth and raising the risk of economic stagnation.  ■