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UK unemployment rate unexpectedly rises

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The UK unemployment rate has unexpectedly gone up while the number of job vacancies has fallen to its lowest level in five years as the initial impact of the Iran war on firms starts to be felt.

The unemployment rate rose slightly to 5% in the three months to March from 4.9% in the three months to February.

Analysts said the figures show the first effects of the Middle East war on the jobs market, and warned demand for workers would likely continue to weaken the longer the conflict goes on.

The rise in unemployment combined with slowing wage growth will give the Bank of England more time to decide whether interest rates need to rise to contain inflation, experts added.

Early estimates from the Office for National Statistics (ONS) suggest the number of job openings fell by 28,000, or 3.9%, to 705,000 between February and April, its lowest level since April 2021.

"Lower-paying sectors such as hospitality and retail have seen some of the largest falls in vacancies and payroll numbers, both in recent months and over the last year," ONS director of economic statistics Liz McKeown said.

According to the ONS, the number of people on payrolls in April also fell. Payroll employment figures dropped by 100,000 last month.

McKeown pointed out the figures come at the start of the new tax year, and they "carry greater uncertainty and have often seen larger than average upward revisions".

While the reliability of the unemployment figures has been affected by data collection issues, a similar picture is painted by other indicators including the drop in vacancies and a fall in the number of employees on payrolls.

Experts said the jobs figures showed there was a growing distress in the labour market. The drop in vacancies suggests businesses are pausing recruitment.

Kate Nicholls, chief executive of UK Hospitality, said the rise in unemployment was linked to higher labour costs, which included changes in employment taxes.

Wage growth was only slightly ahead of inflation, and Susannah Streeter, chief investment strategist at Wealth Club, said that would likely keep spending "subdued" as households brace for higher bills.

Average regular earnings growth fell to 3.4% in the first three months of the year, and was 0.3% higher after inflation was taken into account.

Normally that sort of cooling wage growth would increase expectations of interest rate cuts, but given inflation fears Streeter said "pressure is building for rates to stay higher for longer instead".

Sanjay Raja, chief UK economist at Deutsche Bank, said the jobs data should allow the Bank of England's Monetary Policy Committee to keep rates on hold for longer as it monitors the impact of the Iran war on the UK economy.

Fresh inflation figures will be published on Wednesday, and experts expect a slight fall from the 3.3% recorded in the year to March.

Secretary of State for Work and Pensions Pat McFadden said the ONS employment figures showed there were 416,000 more people in work than this time last year which was encouraging, but the Iran war was "casting a shadow on the labour market".

"Boosting opportunity and tackling youth unemployment in every area remains our priority," he said.

Shadow business secretary Andrew Griffith said the figures confirmed what businesses had been warning about, which was that "employment tax rises are piling costs onto employers and workers are paying the price".

A higher unemployment rate means more people are out of work and looking for work, while a fall in the number of job vacancies means there are fewer jobs to compete for.

Ben Harrison, director of the Work Foundation at Lancaster University, said this was making life "particularly difficult" for young people as the youth unemployment rate has reached 14.7%, its highest since late 2014.

Separate research published by the Institute for Fiscal Studies on Tuesday shows the current fall in youth employment rates is approaching the level of decline seen during the 2008 financial crisis and the Covid-19 pandemic.

The IFS data relates to a different time period to the latest jobs and wages data.

It suggests between December 2022 and December 2025, the proportion of 16 to 24-year-olds in payrolled work fell from 54.9% to 50.6%.

Jed Michael, a research economist at the IFS, said the current trend was concerning because "we know that unemployment early in one's career can have lasting negative consequences".

Jonathan Townsend, UK chief executive of the The King's Trust charity, said the IFS's research indicated that "we cannot simply assume the problem will correct itself as economic conditions improve.

"We urgently need to understand what is pulling more young people away from work and education, including the role of mental health."

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Estonia says Nato jet shot down drone over its territory

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Estonia has said a Nato fighter jet shot down a drone, which it suspects was a Ukrainian projectile knocked off course by Russian electronic jamming, over its territory.

Defence Minister Hanno Pevkur said a Romanian F-16 fired a missile and drone debris fell in a marshy area in central Estonia on Tuesday. No damage was reported.

Ukraine reacted by accusing Russia of deliberately redirecting Ukrainian drones launched at "legitimate military targets" in Russia, apologising to "Estonia and all of our Baltic friends for such unintended incidents".

Russia has not commented on the latest in a series of recent drone incursions over Nato members Estonia, Latvia and Lithuania.

Last week, Latvian Prime Minister Evika Silina resigned following a political crisis over Russia-bound Ukrainian drones straying into Latvian territory.

Earlier this month, two Ukrainian drones hit an empty oil storage site in Latvia. Ukraine said this was the result of electronic jamming by Russia.

A similar incursion was reported by Estonia and Latvia in March.

Moscow has accused the three Baltic states of allowing Ukraine to use their "air corridors" to strike targets inside Russia – a claimed denied by Tallinn, Riga and Vilnius.

Ukraine has recently intensified its drone and missile attacks against targets in Russia, including oil and gas facilities near the Baltic states.

Russian President Vladimir Putin launched a full-scale invasion of Ukraine in 2022.

At Tuesday's news conference, Pevkur said the drone was shot down shortly after 12:00 local time (09:00 GMT) between the lake of Võrtsjärv and the town of Põltsamaa.

He said the projectile had been identified as a potential threat even before it entered Estonia's air space.

"We received early information from Latvia about a drone that had strayed off course, and Estonia tracked the drone until Romanian fighter jets participating in the Baltic air policing mission shot it down," the Estonian defence ministry said in a statement.

Pevkur added he had "immediately" discussed the incident with his Ukrainian counterpart, who apologised for the incident.

"Estonia has not granted permission to use its airspace to anyone other than its allies, and the Ukrainians have not asked for this permission," the Estonian defence minister said.

Local media outlets later published photos of what they said were drone fragments on the ground.

The drone crashed into a forest, about 30m (98ft) from the nearest residential building, Estonia's ERR public broadcaster reported.

It quoted a local resident as saying: "There was a loud bang and I saw the drone fall from the sky."

In Ukraine, Foreign Ministry spokesman Heorhii Tykhyi said "Russia continues to redirect Ukrainian drones into the Baltics" and did this "on purpose, together with intensified propaganda".

In a statement, he said: "We apologise to Estonia and all of our Baltic friends for such unintended incidents," stressing "we use the Russian airspace to get to them".

His comments came just hours after Russia's foreign intelligence agency SVR said that Ukraine was planning to launch its drones against Russian targets from Estonia, Latvia and Lithuania.

SVR reported that Ukrainian drone military personnel had already been deployed at military bases in Latvia.

Latvia dismissed the claim as Russian "disinformation", with the foreign ministry saying Riga "has not given its consent for its territory and airspace to be used to carry out attacks against targets in the Russian Federation".

And Ukraine's Tykhyi said "there is no truth in Moscow's latest set of falsehoods accusing Ukraine of preparing attacks against Russia from the territory of Latvia".

There is growing concern in the three Baltic states on the easternmost flank of Nato that Moscow is planning major provocations to test the resolve of the military alliance.

Last year, more Nato countries agreed to move troops and fighter jets eastwards after more than a dozen drones had entered the airspace of Poland, another member of the alliance.

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Southampton expelled from play-offs for spying

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Spygate is alleged to have taken place two days before Middlesbrough play-off semi-final first leg against Southampton

Southampton have been thrown out of the play-offs after admitting they spied on three clubs in the Championship season.

Middlesbrough, beaten by Southampton in the semi-final, have been reinstated and will now play Hull City for a place in the Premier League.

The EFL charged Saints with watching training sessions involving Oxford United and Ipswich Town, in addition to filming Middlesbrough as they prepared for the first leg of their play-off semi-final on 7 May.

The independent disciplinary commission also handed Southampton a four-point deduction in the Championship for next season.

Saints will now miss out on a game dubbed the richest in world football, with the winners of the play-off final guaranteed a minimum £110m in Premier League broadcast revenue.

The final will remain on Saturday at Wembley with the kick-off time to be confirmed.

Southampton admitted to "multiple breaches of EFL regulations related to the unauthorised filming of other clubs' training", the EFL said.

The club have also received a reprimand in respect of all the charges.

Sources have confirmed to BBC Sport that Southampton will lodge an appeal on Wednesday and will argue that the punishment is disproportionate.

The EFL said it would be "working to try and resolve any appeal on Wednesday 20 May".

It added that "subject to the outcome, it could result in a further change to Saturday's fixture".

The appeal will be heard by an Independent League Arbitration panel with three new members.

The EFL said in a statement: "Southampton was first charged on Friday 8 May, with further charges issued on Sunday 17 May in relation to additional breaches during the 2025-26 season.

"Those additional charges arose from matters identified after the initial proceedings involving Middlesbrough were initiated.

"Southampton admitted breaches of regulations requiring clubs to act with the utmost good faith and prohibiting the observation of another club's training session within 72 hours of a scheduled match.

"The admitted breaches concern fixtures against Oxford United in December 2025, Ipswich Town in April 2026 and Middlesbrough in May 2026."

Southampton did not win any of the three games – they lost 2-1 at Oxford, drew 2-2 at home to Ipswich and claimed a 0-0 draw at Boro.

The statement continued: "The EFL is now in discussion with all three clubs regarding the implications of today's decision and will make a further announcement in due course."

Middlesbrough issued a statement which said they "welcome the outcome".

"We believe this sends out a clear message for the future of our game regarding sporting integrity and conduct," it added.

"As a club, we are now focused on our game against Hull City at Wembley on Saturday. Ticket information for our supporters will be available shortly."

Southampton had already sold tickets for Saturday's game, and their supporters will receive a full refund.

They must now wait to see if the Football Association issues any charges for individuals involved in the spying. The EFL can only apply sanctions against its member clubs.

After a spying case at the 2024 Olympic Games, three members of Canada's staff, including the head coach, were banned from all football by Fifa for a year.

Middlesbrough were at their Rockliffe Park training base preparing for the game against Southampton 48 hours later.

The spy, Southampton analyst intern William Salt, is said to have parked at the golf club, then walked a couple of hundred yards down a road which leads to a raised area of ground.

Sources told the BBC that the accused simply stood pointing his mobile at the training session, while wearing in-ear headphones.

Middlesbrough staff believe he may have been live-streaming the session via a video call.

A member of Middlesbrough's staff approached, say BBC sources, but the person would not identify himself. Then, he quickly deleted some content off his phone before running off into the golf club.

He jogged into the toilets, changed his clothes and hurriedly left the site.

Middlesbrough's photographer took photos and matched him to a photo on the Southampton website. One of those pictures was subsequently made public last week.

Boro were furious and quickly reported it to the EFL.

The EFL charged Southampton with breaking two regulations.

EFL Regulation 3.4, which requires clubs to act towards each other with the utmost good faith; and

EFL Regulation 127, which prohibits any club from observing, or attempting to observe, another club's training session within 72 hours of a scheduled match between the two clubs.

Could Southampton be kicked out of play-offs over Spygate?

Boro want Southampton out of play-offs over Spygate

How Southampton allegedly spied on Middlesbrough

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Grant Shapps quits aerospace firm after watchdog probe

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A former Conservative defence secretary has quit his job with a missile manufacturer over concerns he broke the rules governing the employment of former ministers.

Sir Grant Shapps resigned as chairman of Cambridge Aerospace on 30 April "to simplify matters" and after the firm secured a multimillion-pound government missile contract.

He said he had had no involvement in the deal or the company's military work and, despite a title of "chairman", had not chaired its board or been a director, but was "one of several co-founders".

Ministerial ethics watchdog Sir Laurie Magnus said he had "allowed a perception of impropriety to develop" and "failed to uphold the standards expected in the rules".

Sir Grant served as defence secretary under Rishi Sunak and has held a number of ministerial posts in government.

He was the Conservative MP for Welwyn Hatfield in Hertfordshire from 2005 to 2024, when he lost his seat in the general election.

The now defunct Advisory Committee on Business Appointments (Acoba) approved his role with the company in 2025 on condition that he play no part in its defence-related work until two years after he left office.

Acoba's decision was criticised by anti-corruption campaigners at the time, including Labour MP Phil Brickell, who said Sir Grant's claim the company was focused on "civilian aerospace" was "stretching credulity" given the firm's own description of itself as involved in "defence tech".

In correspondence with Sir Grant, Sir Laurie questioned whether he had complied with this condition, noting the company "seems publicly to have only one project, which is defence-related".

The watchdog initially contacted Sir Grant following the announcement on 10 April of a contract for Cambridge Aerospace to supply the UK and its Gulf allies with "Skyhammer" interceptor missiles.

Sir Laurie said the announcement "appears to be at direct variance with your original description of the role".

He added: "It is, on the face of it, difficult to reconcile the current scope of Cambridge Aerospace's operations with the restriction that you avoid defence matters entirely, and in the absence of a fresh application for advice in view of changes to the nature of the business of Cambridge Aerospace under your chairship."

In response to Sir Laurie's letters, Sir Grant said he had "scrupulously" followed Acoba's rules and was not involved "in any way, at any time, in any capacity" in the contract between Cambridge Aerospace and the Ministry of Defence.

But he apologised for not seeking further advice as the company began working on defence matters, saying this was "an oversight for which the excessive speed of events is the only mitigating circumstance".

Sir Grant also declined to answer a series of detailed questions from Sir Laurie, citing "legal obligations of confidentiality which I cannot unilaterally waive".

Brickell said he welcomed Sir Grant's resignation, but called for tougher sanctions for former ministers who broke the rules.

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