Payroll numbers and vacancies fell as businesses braced for Labour’s brutal tax raid last month.
The number of employees on the books of companies was down 78,000 to 30.3million in March, according to official figures.
Meanwhile vacancies were down 26,000 quarter-on-quarter to 781,000. It was the first time since 2021 they had dipped below pre-Covid levels.
The estimates are from before Rachel Reeves‘ national insurance hike took effect, condemned by critics as a ‘tax on jobs’. Firms have been warning of layoffs and recruitment freezes, with fears the economy is already slowing down.
The Office for National Statistics (ONS) also found that UK average regular earnings growth decreased to 5.6 per cent in the three months to February.
Unemployment held relatively steady in that timeframe, although the ONS has admitted there are problems with the Labour Force Survey used for that metric.
ONS director of economic statistics Liz McKeown said: ‘Regular pay growth remains strong having increased slightly in the latest period. Growth accelerated in the public sector as previous pay rises fully fed through to our headline figures, while pay in the private sector was little changed.
The number of employees on the books of companies was down 78,000 to 30.3million in March, according to official figures
The estimates are from before Rachel Reeves ‘ national insurance hike took effect, condemned by critics as a ‘tax on jobs’
Meanwhile vacancies were down 26,000 quarter-on-quarter to 781,000. It was the first time since 2021 they had dipped below pre-Covid levels
‘The latest survey results estimate that the unemployment rate is unchanged on the previous three months, while separately the number of employees on payroll fell slightly over the same period.
‘Vacancies fell once again on the quarter and are now below pre-pandemic levels for the first time since the spring of 2021.’
Suren Thiru, ICAEW Economics Director, said: ‘These figures indicate that labour market activity was sluggish in the run-up to this month’s substantial surge in tax and tariff costs, with unease over these twin threats limiting hiring plans.
‘This strong wage growth may be more a lagging indicator of wider labour market conditions than strengthening underlying inflation, as it takes time for employers to adjust pay settlements to changing circumstances.
‘The UK’s jobs market is entering a turbulent period with a troubling mix of escalating global uncertainty and rising cost pressures, notably the national insurance hike, likely to moderately push up unemployment, despite continued challenges over skills shortages.
‘While these figures may not shift the dial on a May interest rate cut, concern over the impact of this global financial volatility may push rate setters to act to avoid a marked deterioration in economic conditions.’
Manufacturing and transport were among the hardest hit on vacancies
