UK employers shed jobs in June, with payrolled employee numbers falling 13,000 in June from May, a larger drop than the previously reported 4,000, according to the Office for National Statistics. Unemployment stood at 4.9 per cent in the second quarter, slightly above the 4.8 per cent forecast, while vacancies fell to 707,000 in the three months to July, down from 711,000 in June, underscoring a stagnant market as bosses hold back hiring amid high energy costs.

The weak labour market poses a heavy challenge for Prime Minister Andy Burnham as firms remain reluctant to take on new staff. Despite solid GDP growth of 0.6 per cent in Q1 and 0.4 per cent in Q2, hiring in consumer‑facing sectors such as retail and hospitality remains slow, with younger workers likely to bear the brunt, says Jake Finney, senior economist at PwC UK. “The UK labour market remains stuck in a low‑churn limbo,” adds Suren Thiru, chief economist at ICAEW.

The Bank of England can keep rates at 3.75 per cent unchanged, as output per hour rose 0.7 per cent and productivity improved. Private‑sector wage growth dipped to 2.8 per cent, while public wages rose 6.2 per cent. Economist James Smith notes that weak hiring and wage growth keep the rate‑increase threshold high this year.