UK unemployment rate hits five-year high of 5.2% as wage growth cools
Unemployment in the UK has risen to 5,2%, the highest level in nearly five years, while wage growth continues to slow, raising the prospect of another cut to interest rates in the spring,The Office for National Statistics (ONS) said the rate of unemployment was 5,2% in the three months to the end of December, the highest rate since the quarter to January 2021,This was in line with what economists had been expecting and was up from 5.
1% in the three months to November.Joblessness in the UK has steadily risen since 2022, and businesses have complained that tax rises by Rachel Reeves in her last two budgets have exacerbated this, with rises in national insurance contributions (NICs) and the minimum wage causing particular issues.Economists said younger workers were bearing the brunt of this slowdown in hiring.Unemployment for 18- to 24-year-olds was 14% in the three months to December, the highest rate in five years – or nearly 11 years excluding the pandemic – amid concerns that Britain is slipping down global league table for youth employment.Martin Beck, the chief economist at WPI Strategy, said: “Higher labour costs, reflecting last year’s increase in employer NICs and rises in the adult minimum wage appear to be weighing most heavily on entry-level hiring.
At the same time, firms are likely reassessing junior roles in the face of rapid advances in AI,”In the three months to December, wages excluding bonuses in Great Britain increased by 4,2%, easing from 4,4% the previous month,In the private sector, pay rose by 3.
4%, the lowest level in five years, while wages in the public sector rose by 7.2%.Once adjusted for inflation, annual pay excluding bonuses rose by just 0.8% in October to December, the lowest rate since August 2023.Suren Thiru, the economics director at the Institute of Chartered Accountants in England and Wales, said: “This slackening in pay growth is likely to gather momentum in the coming months as the downward pressure from mounting lay-offs and higher employment costs increasingly weakens workers’ bargaining position.
”The number of people on company payrolls also continued to fall, down 134,000 on a year ago, and by 46,000 over the quarter.On a monthly basis, payrolls fell by 11,000 in January.However, a sharp monthly decline reported in December compared with November was revised upwards by the ONS, from its original estimate of a fall of 43,000 to a fall of just 6,000.The figures suggest the Bank of England is likely to make another cut to interest rates by the spring, as inflationary pressures, such as higher wage growth, appear to be easing.The Bank has forecast that the unemployment rate will rise to 5.
3% this year and that wage growth will moderate from 3.4% last year to 3.25% by the end of the year as inflation falls.At the its recent meeting earlier this month, the Bank kept rates on hold at 3.75%.
Paul Dales, the chief UK economist at Capital Economics, said: “The lack of green shoots of recovery in the labour market and further fall in wage growth supports the idea that the Bank of England has at least a couple more interest rate cuts in its locker, with the chances of the next cut happening in March rather than April edging higher.”Inflation – which measures the pace of price rises – hit 3.4% in December, up from 3.2% a month earlier.The ONS will release data for January on Wednesday.
The work and pensions secretary, Pat McFadden, said: “We know there is more to do to get people into jobs.“Our £1.5bn drive to tackle youth unemployment is a key priority and this month we announced that we’ll make it easier for young people to find and secure an apprenticeship, which comes on top of our investment to create 50,000 new apprenticeships.”
California’s billionaires pour cash into elections as big tech seeks new allies
Tech billionaires are leveraging tens of millions of dollars to influence California politics in a marked uptick from their previous participation in affairs at the state capitol. Behemoths such as Google and Meta are getting involved in campaigns for November’s elections, as are venture capitalists, cryptocurrency entrepreneurs and Palantir’s co-founders. The industry’s goals run the gamut – from fighting a billionaire tax to supporting a techie gubernatorial candidate to firing up new, influential super political action committees (Pacs).The phenomenon squarely fits the moment for the state’s politics – with 2026 being the year that Politico has dubbed “the big tech flex”.Gavin Newsom, California’s tech-friendly governor who has been quick to veto legislation that cramps the sector’s unfettered growth, is reaching his term limit
No swiping involved: the AI dating apps promising to find your soulmate
Dating apps exploit you, dating profiles lie to you, and sex is basically something old people used to do. You might as well consider it: can AI help you find love?For a handful of tech entrepreneurs and a few brave Londoners, the answer is “maybe”.No, this is not a story about humans falling in love with sexy computer voices – and strictly speaking, AI dating of some variety has been around for a while. Most big platforms have integrated machine learning and some AI features into their offerings over the past few years.But dreams of a robot-powered future – or perhaps just general dating malaise and a mounting loneliness crisis – have fuelled a new crop of startups that aim to use the possibilities of the technology differently
The problem with doorbell cams: Nancy Guthrie case and Ring Super Bowl ad reawaken surveillance fears
What happens to the data that smart home cameras collect? Can law enforcement access this information – even when users aren’t aware officers may be viewing their footage? Two recent events have put these concerns in the spotlight.The Guardian’s journalism is independent. We will earn a commission if you buy something through an affiliate link. Learn more.A Super Bowl ad by the doorbell-camera company Ring and the FBI’s pursuit of the kidnapper of Nancy Guthrie, the mother of Today show host Savannah Guthrie, have resurfaced longstanding concerns about surveillance against a backdrop of the Trump administration’s immigration crackdown
US military used Anthropic’s AI model Claude in Venezuela raid, report says
Claude, the AI model developed by Anthropic, was used by the US military during its operation to kidnap Nicolás Maduro from Venezuela, the Wall Street Journal revealed on Saturday, a high-profile example of how the US defence department is using artificial intelligence in its operations.The US raid on Venezuela involved bombing across the capital, Caracas, and the killing of 83 people, according to Venezuela’s defence ministry. Anthropic’s terms of use prohibit the use of Claude for violent ends, for the development of weapons or for conducting surveillance.Anthropic was the first AI developer known to be used in a classified operation by the US department of defence. It was unclear how the tool, which has capabilities ranging from processing PDFs to piloting autonomous drones, was deployed
Elon Musk’s xAI faces second lawsuit over toxic pollutants from datacenter
Elon Musk’s artificial intelligence company xAI is facing a second lawsuit alleging it is illegally emitting toxic pollutants from its enormous datacenters, which house its supercomputers and run the chatbot Grok.The new pending suit alleges xAI is violating the Clean Air Act and was filed Friday by the storied civil rights group the NAACP. The group’s 40-page notice of intent to sue alleges xAI has been polluting Black communities near its facility in Southaven, Mississippi. The pollution comes from more than a dozen portable methane gas generators that xAI set up without permits, the notice alleges.The NAACP’s first notice of intent to sue was filed last June and involves similar allegations regarding the company’s datacenter in Memphis, Tennessee
AI is indeed coming – but there is also evidence to allay investor fears
The message from investors to the software, wealth management, legal services and logistics industries this month has been clear: AI is coming for your business.The release of new, ever more powerful AI tools has coincided with a stock market slide, which has swept up sectors as diverse as drug distribution, commercial property and price comparison sites. Advances in the technology are giving increasing credibility to predictions that it could render millions of white-collar jobs obsolete – or, at least, eat into the profits of established companies.Carl Benedikt Frey, the author of How Progress Ends and an associate professor of AI and work at the University of Oxford, says investors are reassessing the value of companies that rely heavily on selling software or specialist knowledge.“AI turns once-scarce expertise into output that’s cheaper, faster, and increasingly comparable, which compresses margins long before whole jobs disappear
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UK unemployment rate hits five-year high of 5.2% as wage growth cools
Gloom for UK workers as incomes flatline and jobs market falters
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