UK unemployment rises to highest in four years

The UK's jobless rate ticked up to 4.6% in April while payrolled employment has fallen sharply since, according to official figures covering the period when budget tax hikes on businesses came into effect.

The Office for National Statistics (ONS) said the new unemployment rate covering the three months to April was the highest since July 2021. It had previously stood at 4.5% - a total of more than 1.6 million people.

At 4.6%, it is above the peak level predicted for this year, just in March, by the Office for Budget Responsibility. Money latest: My insurance firm charged me £700 after my dog died - is this right? Figures from the taxman also highlighted by the ONS showed the number of people in payrolled employment during May fell by 109,000 - double April's revised figure of 55,000 and the biggest monthly drop in five years.

The ONS Labour Force Survey data was the first to cover April's rises in employer national insurance contributions and the national living wage - hikes to costs for businesses which lobby groups had warned would result in job losses, price rises and lower wage settlements. The ONS figures showed average weekly earnings, excluding the effects of bonuses, over the three months to April were weaker, from a downwardly revised 5.5% to 5.2% year on year.

Liz McKeown, ONS director of economic statistics, said: "There continues to be weakening in the labour market, with the number of people on payroll falling notably. "Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on." The ONS data piles more pressure on Chancellor Rachel Reeves, just a day after she confirmed her winter fuel U-turn would cost £1.25bn.

She has consistently defenced her budget, arguing the taxes on business were a one-off necessary evil to account for a £22bn "black hole" in the public finances inherited from the last government. Employment minister Alison McGovern said in response to the data: "Six months after we launched Get Britain Working, we are already seeing the benefits with economic activity at a record high, with 500,000 more people in employment since we entered office and real wages growing more since July than in the decade after 2010.

"People all over the country are benefiting from increased training opportunities and the newly launched Jobs and Careers Service will allow us to test new and innovative approaches to personalise employment support." Despite the wage figure easing, that 5.2% level remains comfortably ahead of the 3.5% rate of the pace of price growth - inflation. Read more from Sky News:Paternity pay in UK 'among lowest in developed world'Government commits £14.2bn to new nuclear power station The curb to consumer spending power will be welcomed by the Bank of England as its rate-setters continue to fret that strong wage growth represents an inflation risk ahead.

The ONS figures did little to boost financial market expectations of a further rate cut next month. LSEG data showed 90% of market participants believed there would be no no change - with just one further cut this year being fully priced in..