The number of claims for Universal Credit has climbed 13 per cent in the last three months as the cost of living crisis takes hold. 33,000 new claims for the benefit were made between January and April this year - up from 29,000 for the last quarter of 2021.
By mid-April, 5.6million people across the UK were claiming Universal Credit, an increase of 200,000 since November last year. It comes as inflation is forecast to hit 10 per cent later this year, and as the price of energy bills went up 54% last month.
The rate of unemployment dropped to 3.7% in the three months to March – the lowest since October to December 1974, the Office for National Statistics (ONS) said.
For the first time, there were fewer unemployed people than vacancies as job openings hit a record 1.3 million, although the fall in the rate – down from 3.8% in the three months to February – was also due to a rise in the number of people dropping out of the jobs market, the figures showed.
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Calls were mounting for an emergency Budget to offer help amid a crippling cost-of-living crisis as the ONS revealed that regular pay excluding bonuses dropped by 2.9% in March when taking Consumer Prices Index (CPI) inflation into account – the biggest fall since November 2011.
In the three months to February, real regular pay was 2% lower, the steepest decline since 2013.
It comes in spite of another pick up – of 4.2% – in regular average pay in the quarter.
Pay including bonuses jumped 7% and was up 9.9% in March alone as firms ramped up rewards for staff amid a booming jobs market, seen in particular across sectors such as construction and finance.
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Jonathan Ashworth, Labour’s shadow secretary of state for work and pensions, warned Britons were facing a “cost-of-living tsunami”, with real wages now almost £300 lower than they were 15 years ago.
“By refusing to take action on the cost of living through an emergency budget, Rishi Sunak has shown once again the Tories simply aren’t on the side of working people,” he added.
Tony Danker, director general of the CBI business group, told LBC radio the Chancellor needed to “step in now” to help those hardest hit by the cost of living.
Mr Sunak, who has so far resisted intensifying pressure to launch extra help, said: “I understand that these are anxious times for people, but it’s reassuring that fewer people are out of work than was previously feared.”
The latest ONS labour market data also confirmed another rise in the number of UK workers on payrolls, up 121,000 between March and April to 29.5 million.
Darren Morgan, director of economic statistics at the ONS, said the data showed a “mixed picture”.
He said: “Total employment, while up on the quarter, remains below its pre-pandemic level.
“Since the start of the pandemic, around half a million more people have completely disengaged from the labour market.”
Pay has been failing to keep up with inflation for some months, despite strong earnings growth, and official data on Wednesday is expected to show another eye-watering rise in the cost of living – of 9.1% in April – as last month’s hike in the energy price cap hits.
The Bank of England warned earlier this month that the cost crunch is set to leave the UK on the brink of recession, forecasting that inflation will peak at more than 10% later this year.
Bank governor Andrew Bailey on Monday also issued an “apocalyptic” warning about rising food prices and policymakers have said unemployment will start to rise as the crisis deepens, with the rate set to rise back up to around 5.5%.
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The jobs figures showed there were 118,000 fewer jobless Britons at 1.26 million in the quarter to March, while those in employment rose 83,000 to 32.6 million.
Those classed as economically inactive rose by 65,000 in the quarter to 8.8 million.
But there were signs that workers are being forced to go back into the jobs market to beat the cost crunch, with a record-high movement of people from economic inactivity into employment.
