People starting new jobs at lowest level in five years

The number of people starting new jobs has fallen to its lowest level in five years, according to new figures, as the number of vacancies continues to fall.

The Office for National Statistics (ONS) said that while the labour market remained "broadly stable", some areas showed signs of weakening.

Liz McKeown, the ONS's director of economic statistics, said the further drop in job vacancies suggested that "firms are becoming more cautious about taking on new staff".

The unemployment rate fell slightly to 4.9% in the three months to April, from 5% in the three months to March.

Regular pay — which excludes bonuses — grew at an annual rate of 3.4% in the three months to April, which was unchanged from the three months to March.

It means that average earnings are rising slightly faster than prices.

However, McKeown said regular wage growth in the private sector was rising at its lowest rate in five and a half years.

She added that there are "some signs of workers moving into self employment" against a backdrop of falling vacancies.

The figures come ahead of the Bank of England's decision on interest rates later on Thursday. Analysts broadly expect the Bank to hold its key rate at 3.75%.

Ben Caswell, a senior economist at the National Institute of Economic and Social Research, said the data pointed to a "gradual easing in the labour market".

"Alongside yesterday's softer inflation figures and the tentative agreement to reopen the Strait of Hormuz, this gives the Bank of England the final green light to vote for a hold this afternoon."

Patrick Milnes, the British Chamber of Commerce's (BCC), head of policy for people and work, said businesses remain cautious about hiring as they struggle with the cost of labour.

"Many businesses are pressing pause on recruitment as uncertainty looms around costs, global headwinds and domestic policies."

The government is grappling with growing youth unemployment, as more firms look to hire staff with previous experience or cut graduate schemes.

The quality of ONS statistics has been criticised in recent years, with a review last year finding "deep seated" issues with the body.

The Labour Force Survey, which it uses to report payroll and employment figures, consistently sees low response rates.