BUSINESS LIVE: Unemployment hits 4.5%; Retailers enjoy warm weather; Marston’s returns to profit

Shoppers spent more on products made in Britain last month, as small businesses reckoned with the impact of Trump’s tariffs.

Seven in 10 shoppers want to support local businesses by buying more home-grown products, with one in eight willing to pay a premium, Barclays latest consumer spending report found.

On The Beach is expecting its biggest ever summer of bookings as demand for package holidays booms and people continue to ‘prioritise travel; over other spending.

The travel group said it is expecting to see another record year of revenues as sales by total transaction value surged 13 per cent year-on-year to more than £640million in the six months to the end of March.

This was driven by an 11 per cent increase in the volume of bookings over the period, which has risen to 18 per cent since the beginning of April, OTB said.

Boss Shaun Morton added: ‘Demand for holidays remains strong as our customers continue to prioritise travel, and we are proud to have increased the breadth and quality of our offer so that they can holiday better and more often.

‘This trend is reflected in our Summer ’25 forward order TTV which is currently 14% ahead of last year. Our trading momentum, coupled with the continued execution of our strategy, means we are well placed to deliver our biggest summer to date and remain on track with our medium term ambition.’

Nissan will axe 11,000 more jobs than feared – taking the total number of roles cut to 20,000.

The Japanese car maker is planning to lay off 15 per cent of its workforce as part of a major restructuring drive.

Trade talks: US President Trump said he plans to speak to Chinese president Xi Jinping ‘maybe at the end of the week’

Global stock markets rallied yesterday as the US and China agreed to slash tariffs for 90 days in a major de-escalation of a trade war that threatened to plunge the world into recession.

In what Donald Trump described as ‘a total reset’ in relations with Beijing, the US will cut extra import duties on Chinese goods from 145 per cent to 30 per cent. The levy on those going the other way will fall from 125 per cent to 10 per cent.

Shore Capital analyst Clive Black:

‘Good weather has persisted into May, which is welcome, but wider clouds need to
dissipate for the UK consumer economy to improve.

‘Notably business and consumer confidence both remain weak and are not likely to improve from increasingly probable higher taxes and further government expenditure cuts in the October Budget, all of which suggests the MPC missed an opportunity with only the 0.25% May rate decision.’

The sunniest April on record helped boost retail sales by 7 per cent on last year, new figures show.

The significant increase was also helped by this year’s late Easter, but even figures for March and April combined – to smooth out any distortion – show sales were 4.3 per cent higher than a year ago, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.

April’s 7 per cent boost was above three-month average growth of 2.9 per cent and the 12-month average of 1.4 per cent.

BRC chief executive Helen Dickinson said: ‘The sunniest April on record brought with it a boost to retail sales.

‘While the stronger performance was partially a result of Easter falling in April this year, the sunshine prompted strong consumer spending across the board.

‘But clouds loom on the horizon as new costs begin to bite. Even a strong April performance will do little to make up for the extra £7 billion facing the industry this year.

‘Both employer national insurance contributions and the National Living Wage rose last month, and retailers face another £2 billion bill when a new packaging tax comes in later this year.’

Pub group Marston’s swung to a half-year pre-tax profit, helped by its cost-efficiency actions, higher food and drinks sales, and favourable weather.

Marston’s posted an underlying pre-tax profit of £19million for the six months to the end of March, compared with a £200,000 loss a year earlier.

After a period of weak sales due to unfavourable weather conditions and high inflation, pub groups are seeing a rise in customer spending as the weather turns warmer.

However, Britain’s hospitality sector is facing renewed costs pressures after the introduction of higher employment taxes from last month.

Marston’s boss Justin Platt said: ‘With strong recent trading across our nationwide estate of great local pubs, we are excited for the summer months ahead.

‘We remain confident in achieving our financial goals for the full year and focused on executing our strategy as a pure play hospitality company to deliver sustainable growth and increasing returns for our shareholders.’

Sarah Coles, head of personal finance, Hargreaves Lansdown:

‘If this was a period drama, this would be the scene in which the labour market developed a persistent cough and started to faint into furniture. It’s not that the market is looking in bad shape, there are just some telltale signs that the future may not be desperately healthy.

‘It means we can’t necessarily take job security and wage rises for granted in the coming months, so it’s worth doing what we can to build our resilience while we have the opportunity.’

Alex Hall-Chen, principal policy advisor for employment at the Institute of Directors:

‘Today’s figures indicate declining employer demand for labour in the UK job market, with the number of payrolled employees decreasing on the month by 0.1% and vacancies falling by 42,000 on the quarter.

‘The business case for hiring has been weakened by a perfect storm of last month’s increased employer National Insurance Contributions and above-inflation increases to the minimum wage, alongside a wave of measures in the Employment Rights Bill which will make hiring staff riskier and costlier.

‘If the government is to achieve its aim of an 80% employment rate, it must take urgent action to restore business confidence in hiring. We urge the government to support targeted changes to the Employment Rights Bill which would ensure that the Bill works for both businesses and employees.’

UK unemployment rose to 4.5 per cent in the first three months of the year, up from 4.4 per cent in the previous quarter and the highest since the third quarter of 2021, fresh data from the Office for National Statistics shows.

The ONS also said average weekly earnings, excluding bonuses, rose by 5.6 per cent year-on-year over the first quarter, just under economist forecasts of 5.7 per cent but keeping the pressure on the overall rate of inflation.