Investing.com - The U.K. unemployment rate rose once more in April, data showed Tuesday, pointing to a slowing jobs market and increasing the pressure on the Bank of England to continue cutting interest rates.
According to the Office for National Statistics, the jobless rate rose to 4.6% in the three months to April, as expected, up from the 4.5% seen in February.
This was the highest level since July 2021.
Estimates for payrolled employees in the U.K. also decreased by 55,000, or 0.2%, between March and April 2025, ONS added, and fell by 115,000, or 0.4%, between April 2024 and April 2025.
Pay growth across the whole economy, excluding bonuses, also fell to an annual 5.2% rate in the three months to April, as expected, and below the revised 5.5% seen the prior month. This was below the 5.4% expected, and the previous March figure of 5.6%.
Higher national insurance contributions and the rise in the national living wage, which both came into effect in April, appear to have continued to have an impact on employers taking on staff heading into the summer months.
Data released late last week showed that British construction firms reduced staff numbers last month at the fastest pace in nearly five years, reflecting higher wage costs and reduced demand.
"The construction sector continued to adjust to weaker order books in May, which led to sustained reductions in output, staff hiring and purchasing," S&P Global economics director Tim Moore said.
The Bank of England cut interest rates last month by quarter of a percentage point to 4.25%, with the policymakers indicating that tariff increases by the U.S. and other countries would trim British economic growth and push down on inflation.
"The past few weeks have shown how unpredictable the global economy can be. That’s why we need to stick to a gradual and careful approach to further rate cuts," Governor Andrew Bailey said.
The BoE has now cut interest rates by the same amount as the U.S. Federal Reserve since mid-2024 but by less than the European Central Bank due to concerns about high wage growth as well as the risk of persistently above-target inflation.
The BoE said it had no pre-set path for rates. It also said the impact of global trade tensions "should not be overstated".