UK Unemployment Rate Rises to 4.7% in May, Above Market Forecast

UK Unemployment Rate Rises to 4.7% in May, Above Market Forecast

The United Kingdom's (UK) Unemployment Rate climbed to 4.7% in the three months to May, according to official data published by the Office for National Statistics (ONS) on Thursday. The figure was slightly higher than the expected 4.6% and up from 4.6% in the previous three-month period ending in April.

Key UK Labor Market Figures (May 2025):

• Unemployment Rate (ILO): 4.7% (vs. 4.6% expected)
• Claimant Count Change (June): +25.9K (vs. +17.9K expected)
• Employment Change: +134K (vs. +89K prior)
• Average Earnings Ex-Bonus (3M YoY): +5.0% (vs. +5.3% prior)
• Average Earnings Inc-Bonus (3M YoY): +5.0% (vs. +5.4% prior)

Mixed Signals from the UK Labor Market

While unemployment inched higher, wage growth cooled, suggesting that the tightness in the labor market may be easing. The Claimant Count, which measures the number of people claiming jobless benefits, rose by 25.9K in June, significantly more than May’s revised increase of 15.3K.

The Employment Change figure improved, showing 134K more people employed in May, but this was tempered by slowing wage growth, with Average Earnings (excluding bonuses) rising 5.0%, slightly down from 5.3%.

These mixed signals suggest uncertainty for the Bank of England (BoE), which is monitoring labor market conditions closely before deciding whether to maintain or adjust its current restrictive monetary policy stance.

GBP/USD Reaction

In response to the data, GBP/USD extended losses, slipping below 1.3400, reflecting investor concerns over economic softness and the potential impact on monetary policy.

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