The Office for National Statistics (ONS) said average regular earnings, excluding bonuses, fell sharply to 5.2% in the three months to April,

Rachel Reeves has been dealt another blow as Britain’s jobless rate surged to its highest level for nearly four years. Pay growth for UK workers eased by more than expected as employers faced surging staff costs, official figures have shown.

The Office for National Statistics (ONS) said average regular earnings, excluding bonuses, fell sharply to 5.2% in the three months to April, from 5.5% in the previous three months and the lowest since the third quarter of last year.

While this is still outstripping inflation, up by 2.1% with Consumer Prices Index inflation taken into account, it was lower than predicted, with most experts pencilling in a fall to 5.3%.

The rate of unemployment also jumped to 4.6% in the three months to April, up from 4.5% in the three months to March and the highest level since the three months to July 2021.

The figures also showed vacancies tumbled by 63,000 to 736,000 in the three months to May, while payroll data revealed the biggest drop for five years last month, down 109,000 to 30.2 million.

It coincided with firms facing a hike in national insurance contributions in April, which had been announced in October’s budget.
Liz McKeown, ONS director of economic statistics, said: “There continues to be weakening in the labour market, with the number of people on payroll falling notably.

“Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.”