The media has been focused on the UK unemployment rate rising to 4.6% from 4% at the general election in July 2024. But that is based on a survey and distorted by the self-employed and zero hours contract workers.
More concerning were payroll numbers based on the Inland Revenue's numbers. These are more accurate as nobody pays employee national insurance if they haven't got a job. Here are the numbers:
Payroll employment fell by 109,000 in May, and by 227,000 since the general election.
This is a consequence of Rachel Reeves' hike in Employer National Insurance, and more particularly her decision to apply Employer N.I. to earnings above £5,000 instead of £9,000. That's hurt businesses who employ a lot of part-timers.
Most businesses have responded with a hiring freeze, and are not replacing those who leave or retire. Instead they're scrambling to streamline and automate their operations.
There is a silver lining - productivity should improve. But no government likes to preside over rising unemployment. Rachel Reeves could get lucky in that the people losing their jobs could be migrants; the 5 million legacy EU people on the Brexit settlement scheme, or the 2 million on work visas. These people can't vote. And if they leave it helps the immigration numbers.
So it might all work out; higher productivity and lower migration. But it needs the stars to be aligned. If citizens are the ones losing their jobs, Labour will get hammered at the next election.