New jobs figures show that the growing numbers of people are choosing a life on “benefits street” because of the way Chancellor Rachel Reeves and other Labour Ministers have managed the economy, Conservatives claimed. Unemployment has fallen but the number classed as “economically inactive” has risen to 20,489,441 people, a rise of 68,917. They are not officially unemployed because they are not looking for a job.

Andrew Griffith, Shadow Business Secretary, said: “These figures disguise the fact that many people have fallen out of the workforce and are adding to the ever greater ranks of sick note Britain where being on Benefits Street is better than a hard days graft. We need to create an economy that encourages people back into the workforce.” And Helen Whately, the Shadow Work and Pensions Secretary, said: “Labour are killing jobs and people are giving up."

Ms Whately said: “The rise in economic inactivity tells us people aren’t even trying to get work anymore. That means more people on benefits and a higher welfare bill, at the taxpayers expense.”

But Work and Pensions Secretary Pat McFadden said: “This month’s figures show that there are 400,000 more people in work than this time last year, but we know ongoing instability in the Middle East is causing uncertainty in our labour market.

“We have the right economic plan for growth and stability in a volatile world – and we are taking action to create opportunity and make sure that no one is left behind.

“We are pushing ahead with the biggest youth employment reforms in a generation to create almost a million opportunities for young people, boosting skills through our Youth Guarantee backed by a £2.5 billion investment and supporting 300,000 disabled people through our Connect to Work programme to futureproof our workforce to help more people into work.”

Vacancies in the UK have slumped to their lowest level in over five years, as firms apparently pull back hiring in the face of economic uncertainty and soaring wage costs.

The Office for National Statistics (ONS) said vacancies tumbled by 19,000 quarter-on-quarter to 707,000 in the three months to May, which is the lowest since the three months to April 2021.

The ONS said the drop in vacancies was significant across retail and hospitality sectors and smaller employers, while the largest fall in the quarter was in professional services.

The latest figures show Britain’s rate of unemployment edged lower to 4.9% in the three months to April, down from 5% in the three months to March.

The number of number of workers on payrolls fell by 53,000 during April to 30.3 million, but the more timely flash estimate showed a rise of 2,000 last month, though the ONS stressed this is subject to revision.

Wages growth meanwhile remained unchanged at 3.4% in the three months to April after recently easing back, and continues to outstrip inflation rising by 0.3% after taking Consumer Prices Index inflation into account.

Liz McKeown, ONS director of economic statistics, said: “The labour market remained broadly stable in the latest quarter, with further softening evident in some measures.

“Payroll numbers continued to fall over this period, with new recruits at their lowest level in five years.”

She added there were “some signs of workers moving into self‑employment”, while the vacancies decline signalled firms are “becoming more cautious about taking on new staff”.

The ONS said its vacancies survey showed some firms are putting recruitment on hold due to economic uncertainty and higher labour costs.

The Government hiked employee National Insurance Contributions in April last year, while firms have also been hit by above-inflation rises in the minimum wage.