UK

IMF urges UK to continue fiscal deficit reduction

The International Monetary Fund has advised the UK government to persist in reducing its fiscal deficit amid rising concerns from bond investors regarding potential leadership changes in the Labour Party, particularly with Andy Burnham's possible bid for leadership. The IMF praised Chancellor Rachel Reeves for balancing deficit reduction with growth-friendly spending, while also warning that the UK has limited capacity for further tax increases due to economic constraints. As the Labour leadership contest unfolds, investors remain wary of the implications for government borrowing and fiscal policy.

UK unemployment rises to 4.9% as job vacancies decline

The UK unemployment rate rose to 4.9% in the three months leading to March 2026, with job vacancies falling to 711,000, the lowest level since early 2021. This decline in vacancies, down 29,000 or 3.9% from the previous quarter, reflects a broad downturn across 13 out of 18 industry sectors, particularly affecting small businesses. Currently, there are approximately 2.5 unemployed individuals for each available job, indicating a significant loosening of the labor market compared to the tight conditions seen in mid-2022.