Must read: UK unemployment rate hits 5%, Topps Tiles
ii’s head of investment rounds up the morning’s big news.
19th May 2026 10:02
by Victoria Scholar from interactive investor
UK unemployment rate
In the three months to March, UK unemployment rose to 5%, defying expectations for the rate to remain at 4.9%. Vacancies fell to a five-year low between February and April and the number of payrolled employees fell by 100,000 - the most in six years since the pandemic in May 2020. Wage growth also slowed with regular pay excluding bonuses rising by 3.4%, down from 3.6% in the previous period, hitting the weakest level since October 2020.
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The Middle East conflict is taking its toll on the UK labour market. Businesses are becoming more reluctant to take on the expensive long-term fixed costs of permanent hires amid the unstable economic backdrop and the threat of inflation which will increases cost pressure for companies. The combination of rising prices and higher unemployment raises concerns about a painful stagflation scenario.
On a more positive note, the growing slack in the labour market makes it more likely that the inflationary shock will only be short term, since it is not leading to higher wages. This suggests that the UK is not facing a wage price spiral, which reduces the need for major monetary tightening from the Bank of England.
Topps Tiles
Topps Tiles reported half year pre-tax profit of £2.2 million, down from £3.2 million year-on-year, falling 31%. However, like-for-like sales in the first seven weeks of H2 rose by 0.6%, up from a 2% drop in Q2. H1 online revenue was also a bright spot, growing 21% year-on-year and the company said CTD Tiles, which it acquired in 2024, is expected to shift from loss making to profitability in the second half of the year and has seen strong 3% revenue growth so far in H2.
It was a mixed report from the tiling brand which is dealing with notable macro headwinds stemming from the Middle East conflict, most notably rising energy prices which are pushing up costs. The weak UK consumer backdrop is also weighing on Topps Tiles. DIY spending is not a priority for consumers at a time when household budgets are under strain from inflation. Topps Tiles has been taking measures to cut costs and counter the weakness by announcing plans to close 23 underperforming stores.
Shares are down around 15% so far this year.
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