Britain’s unemployment rate remained unchanged at 4.9% in the three months ending in May, according to the latest data from the Office for National Statistics (ONS), marking a 0.2 percentage point increase compared with the same period last year. The number of people employed on UK payrolls decreased by 4,000 from May to June, bringing the total to 30.3 million workers.

Vacancies across the country declined further, particularly among smaller businesses, as firms scaled back hiring amid rising costs. The total number of job vacancies fell by 7,000 in the quarter to June, reaching 712,000. This decline follows a 19,000 reduction in vacancies recorded in the previous quarter. Smaller businesses accounted for a drop of 8,000 vacancies, though some of this was offset by a rise in openings within medium-sized enterprises, the ONS said.

The current labor market conditions have drawn concern from Conservative politicians who point to ongoing economic challenges faced by Chancellor John Healey. Shadow Business Secretary Andrew Griffith said Healey has assumed responsibility for an economy in “dire straits.” He criticized recent policy changes, including the Employment Rights Act, arguing that increased costs and regulatory complexity for employers could hinder job creation efforts.

Analysts have noted that while the worst phase of job losses may have passed, the outlook remains uncertain amid external pressures. Matt Swannell from the Item Club described the recent stabilization as a “temporary respite,” cautioning that the impact of wider geopolitical tensions, such as the conflict in Iran, could drive inflation higher and place further strain on the labor market.

The data underscores persistent difficulties in Britain’s jobs market as employers and policymakers navigate inflationary pressures and cost challenges that continue to influence hiring decisions across different sectors.