Rachel Reeves left economy in ‘dire straits’ with unemployment high | Politics | News

Chancellor John Healey inherits a “struggling” economy from his predecessor Rachel Reeves and unemployment remains stubbornly high, the Conservatives have warned. Figures from the Office for National Statistics (ONS) showed Britain’s overall unemployment rate remained steady at 4.9% in the three months to May.

The number of workers on payroll in England fell by 4,000 to 30.3 million between May and June, better than feared. Job vacancies have fallen further as under-pressure small businesses rein in hiring in the face of rising costs and high wage bills. There were 7,000 fewer vacancies in the quarter to June, following a fall of 19,000 in the previous three months; 712,000.

The ONS said this was driven by small businesses where vacancies fell by 8,000, but this was partly offset by an increase among medium-sized firms.

Shadow Jobs Secretary Andrew Griffith said: “Today’s figures do not change the fact that the last Labor Chancellor inherited a struggling economy.

“The Employment Rights Act is already increasing costs and complexity for employers and risks hindering future job creation. Any progress would come despite Labour’s policies, not because of them.”

Experts said the figures suggested the worst of the employment market slump may be behind us, but warned of a possible further blow if the ongoing Iran war causes inflation to rise.

Matt Swannell, chief economic adviser at the Item Club, said: “There are some signs that labor market disruption has bottomed out.

“However, we think this will provide a temporary respite and, with a sustained reduction in the use of the Strait of Hormuz looking increasingly likely, we expect higher energy prices to put pressure on growth and the employment market.”

The ONS figures will be watched closely by policymakers at the Bank of England ahead of its interest rate decision on July 30.