The United Kingdom’s unemployment rate has surged to 4.6%, the highest it’s been in nearly four years according to the latest figures from the Office for National Statistics (ONS).
This rise, recorded over the three months ending in April, is up slightly from the 4.5% rate seen in the first quarter of 2025. The increase reflects growing pressure on UK businesses, many of which are grappling with a recently implemented tax hike and new tariffs from the United States.
April marked the rollout of a higher business tax introduced in the Labour government’s first budget since taking office last October. Simultaneously, a baseline 10% tariff imposed by U.S. President Donald Trump came into effect, targeting the UK alongside other countries.
“There continues to be weakening in the labour market, with the number of people on payroll falling notably,” noted Liz McKeown, ONS Director of Economic Statistics. She added that survey responses suggest many businesses are either delaying hiring or choosing not to replace outgoing staff.
Wage growth has also slowed, contributing to speculation among analysts that the Bank of England may continue to lower interest rates through 2026. These cuts could help support businesses but may further weaken the pound.
“We now feel more confident in our forecast that the Bank will reduce interest rates more aggressively than markets anticipate potentially down to 3.5% next year,” said Ruth Gregory, Deputy Chief UK Economist at Capital Economics.
The Bank of England last cut its base rate in May, lowering it by 0.25% to 4.25%.
