Unemployment figures rise as food inflation highlights bleak state of UK economy

Jobless rate lifted to 3.8 per cent in the three months to February

The cheapest products are being the hardest hit by inflation in percentage terms. EPA

Britain’s unemployment rate has risen alongside increasing inflation as the cost of some staples soared by more than 15 per cent.

The jobless figure rose and the number of vacancies fell for the ninth month in a row as the economic gloom began to take its toll on the employment sector, official figures from the Office for National Statistics (ONS) show.

Meanwhile, the cost of food staples, such as cheddar cheese, white bread and porridge oats, have soared year on year, according to latest inflation figures from consumer watchdog Which?

The unemployment rate lifted to 3.8 per cent in the three months to February, up from 3.7 per cent on the previous three months, the ONS said. Most economists had expected the rate to remain unchanged.

The data showed that vacancies fell by another 47,000 to 1.1 million in the three months to March.

The ONS said this reflected “uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment”.

Wage growth continues to be outstripped by soaring costs, with total pay including bonuses down by 4.1 per cent when Consumer Prices Index inflation is taken into account — this comes despite a 5.9 per cent rise in earnings, the ONS said.

“With the number of people neither working nor looking for a job down again, there were rises in both those in work and those actively looking for a job,” said ONS director of economic statistics Darren Morgan.

“However, while the group outside the labour market — termed 'economically inactive' — fell, the number among them who were long-term sick rose to a record high. Job vacancies have fallen again but remain at very high levels.

“Meanwhile, pay continues to grow more slowly than prices, so earnings are still falling in real terms, although the gap between public and private sector earnings growth continues to narrow.”

Which? found overall inflation on food and drink at supermarkets continued to rise last month to 17.2 per cent, up from 16.5 per cent the month before, the watchdog found.

Cheddar cheese prices increased by an average 28.3 per cent across eight major supermarkets — Aldi, Asda, Lidl, Morrisons, Ocado, Sainsbury's, Tesco and Waitrose — compared to a year ago.

However, one cheese, Dragon Welsh Mature Cheddar 180g at Asda, increased from £1 in the three months to the end of March last year to £1.80 across the same period this year — an 80 per cent rise year on year.

The consumer group analysed inflation on more than 26,000 food and drink products at the eight supermarkets, and also selected a basket of staple foods including cheddar cheese, sliced white bread, white potatoes and porridge oats to find which of these everyday products had undergone the biggest price increase.

The cost of porridge oats went up by an average of 35.5 per cent across all eight supermarkets compared to the same time last year.

However, the worst single example of inflation on porridge oats was at Ocado where Quaker Oat So Simple Protein Porridge Pot Original 49g went from 94p to £1.56 — an increase of 65.5 per cent.

The figures show it continues to be the cheapest products that are hardest hit by inflation in percentage terms.

Which?'s tracker shows supermarkets' own-label budget items — still the cheapest overall — were up 24.8 per cent in March compared with the same time last year, higher than the 20.5 per cent increase seen on standard supermarket own brands and the 13.8 per cent on branded and premium own-brand ranges.

Which? called on the major supermarkets to act by making budget items widely available, particularly in areas where people are most in need, and to make pricing and offers more transparent so that people can easily work out which products are the best value.

Sue Davies, Which? head of food policy, said: “Our latest supermarket food and drink tracker paints a bleak picture for the millions of households already skipping meals of how inflation is impacting prices on supermarket shelves, with the poorest once again feeling the brunt of the cost-of-living crisis.

“While the whole food chain affects prices, supermarkets have the power to do more to support people who are struggling, including ensuring everyone has easy access to basic, affordable food ranges at a store near them, particularly in areas where people are most in need.

“Supermarkets must also provide transparent pricing so people can easily work out which products offer the best value.”