The employment market in the United Kingdom is displaying the first signs of feeling the impact of the Iran war, after newly published figures showed the unemployment rate has unexpectedly gone up at the same time as the number of job vacancies has reached its lowest level in five years.

According to the Office for National Statistics, the jobless rate for the first three months of the year unexpectedly rose from 4.9 percent in February to 5 percent in March, when the forecast had been for it to stay the same.

At the same time, the number of people claiming unemployment benefits in April rose by 27,000, the largest increase since July 2024, and the number of payroll employees fell in April by 100,000, as opposed to 28,000 in March, the largest decline since the early days of the pandemic. In addition, after taking inflation into account, wages have risen by just 0.3 percent.

Martin Beck, chief economist at the economics consultancy WPI Strategy, told The Guardian newspaper several factors were to blame, including energy prices and geopolitical instability, and he noted that the impact was being felt differently among different age groups, with the young suffering the most.

"Since payroll employment peaked in October 2024, the number of employees aged 34 and under has fallen by 296,000, while employment among those aged 35 and over has risen by over 18,000," he said. "In other words, the slowdown is not being felt evenly: younger workers continue to bear the brunt of a cooling labor market."

One of the reasons for this is because sectors including hospitality and retail, traditionally a way into employment for younger people, have been hard hit.

"Boosting opportunity and tackling youth unemployment in every area remains our priority," said UK's Work and Pensions Secretary Pat McFadden. "Through our jobs guarantee, we are helping young people into work, while engaging employers to ensure they have the skilled workforce that they need."

The jobs guarantee is a project introduced in six regions of England and Wales in the spring, guaranteeing a fully subsidized six-month paid job to every 18-year-old to 21-year-old receiving universal credit payments who have been looking for work for 18 months.

Paul Nowak, general secretary of the Trades Union Congress, told radio station LBC the figures highlight "an epidemic of insecure work in this country" that is impacting younger workers.

"Growing numbers of young people are struggling to get a job, with 592,000 unemployed," he said. "The government's jobs guarantee is an important step forward, but young people shouldn't have to wait for 18 months before getting access to it. The government needs to double-down on delivering good, secure, and well-paid jobs across the country and driving forward change in young people's life chances."