UK unemployment rises to 1.7m
Latest figures released by the Office for National Statistics revealed that UK unemployment increased by 21,000 to 1.7m, the first increase since June 2015. The rise is small, and unemployment remains at around 5.1%, which is still a fall from 5.6% at this time last year. Leading experts have suggested that the upcoming EU "in/out" referendum is causing firms to put off hiring whilst a period of uncertainty exists.
John Hawksworth, chief economist at PwC, said that only time would tell whether the referendum would have a long term impact on figures. In an interview with the Independent, he commented that: "These latest data are consistent with other evidence that UK growth slowed somewhat during the first quarter of 2016, reflecting a more fragile global economy and uncertainty related to the EU Referendum outcome in June," he said.
Speaking to the BBC, Ben Brettell, senior economist at Hargreaves Lansdown echoed this view: "Last week the Bank of England said that concerns about the EU referendum had begun to affect the real economy. The increase in unemployment announced today adds some weight to that hypothesis. It's possible businesses are delaying decisions about hiring and investment until after June's vote, which could lead to a slowdown in the first two quarters of this year."
It's worth also noting that the introduction of the National Living Wage in April of this year would also be likely to halt recruitment drives in businesses faced with increased wage bills, as predicted by ex-Sainsbury's boss Justin King, who derided the increase as "not economically justified".
Whether either or both of these factors have had much influence remains to be seen, and commentators will be keenly awaiting the next set of figures from the ONS.