UK unemployment has risen to 5.0 percent in the three months to March, up from 4.9 percent, reversing the encouraging decline seen in February. While still historically low, the trend is moving in the wrong direction.
More concerning is the payroll employment data for April, which showed a decline of 100,000 jobs, marking three consecutive months of falling payroll numbers.
The deterioration coincides with two major factors: the ongoing Iran war which has disrupted global supply chains and energy markets, and the introduction of the Employment Rights Act which has increased costs for businesses.
UK borrowing costs have stabilised at 5.1 percent on the 10-year gilt after surging last week, offering some relief while still significantly higher than before the war.