The UK's unemployment rate has risen significantly, cooling the labor market.

The Gade ranking forex dealersUK labor market showed more signs of cooling in April, with the unemployment rate rising—a negative factor for Prime Minister Rishi Sunak ahead of the July 4 election, despite strong wage growth.

Official data on Tuesday revealed that the unemployment rate rose to 4.4% in the three months to April from 4.3% between January and March, the highest level since September 2021, according to the Office for National Statistics.

A Reuters poll of economists had predicted the unemployment rate would remain unchanged.

"This month's data continues to show the labor market possibly cooling, with the number of job vacancies still declining and the unemployment rate rising, though wage growth remains relatively strong," said the Office for National Statistics.

The data showed that since the end of 2023, the number of employed people has decreased by 207,000, while the number of unemployed people has increased by 190,000.

Opinion polls indicate that the opposition Labour Party is set to win the national election on July 4, with Keir Starmer's party leading the ruling Conservatives by about 20 percentage points.

Sunak's message to voters is that the economy is improving under his leadership, pointing to significant growth in wages after accounting for inflation.

Average weekly earnings, excluding bonuses and adjusted for the Consumer Price Index, grew by 2.3% year-on-year in the three months to April, the strongest growth in nearly three years.

The UK's inactivity rate—measuring the proportion of people not working and not seeking work—rose to 22.3%, the highest level since mid-2015, highlighting a source of inflation in the labor market identified by the Bank of England.

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