RISING unemployment and new pressure on earnings revealed today form a grim backdrop to Chancellor Rachel Reeves’s long-awaited spending review.

Negative official statistics led to union calls for the government to move faster in gripping Britain’s economic crisis.

The jobless rate is at its highest since the Covid pandemic, up to 4.6 per cent in the three months to April.

And earnings grew by less than expected, according to the Office for National Statistics. And while the 5.2 per cent growth in the quarter is still ahead of inflation, it was below the 5.5 per cent in the preceding three months.

Unite general secretary Sharon Graham said: “As real wages slow again, we have to remember that growth and profits doesn’t always equal jobs and wages.

“This country needs a joined-up industrial strategy and ambitious public investment to escape the never-ending cost of living crisis.”

And TUC general secretary Paul Nowak said it was “vital we see sustained investment in the services that support people to move into and stay in work, particularly young people who need genuine opportunities to learn and earn as they start their careers.”

He added that “a funding boost for the NHS will help people who are being kept out of work due to ill health and problems accessing treatment” but said that the Bank of England must “do its part” by cutting interest rates.

Even Ms Reeves herself conceded, speaking to the GMB union conference in Brighton, that most people are not feeling the effects of the economic progress she claims to have made.

Many Labour MPs also question her claim that the spending review will make “working people better off.”

In fact, she is likely to prioritise increased spending on the military and the NHS at the expense of other services and sectors.

The government is also making much of its capital investment plans, with billions of pounds set aside last week for a range of transport projects, and the building of a new nuclear reactor at Sizewell announced yesterday.

But this has led to blazing rows behind closed doors as other areas are squeezed.

Home Secretary Yvette Cooper has been rumoured to be contemplating resignation after failing to get the funding she believes is needed to meet Labour’s policing commitments.

And deputy prime minister Angela Rayner went down to the wire in talks with the Treasury about resources for social housing, as doubts grow that Labour will hit its target of building 1.5 million new homes over the course of the parliament.

Backbenchers are hoping that the U-turn over the cut in the winter fuel benefit — now universally acknowledged to have been a political disaster — will not be the last.

However, there is no sign of ministers reversing the larger cuts to the welfare budget, mainly at the expense of the disabled, ordered by Ms Reeves and PM Sir Keir Starmer.

It is certain that Ms Reeves will prioritise keeping within her Treasury-dictated fiscal rules, limiting debt levels, and the government is also sticking to its pledges to avoid taxing the rich and business further.

Ms Reeves claimed at the GMB congress that the government was “making Labour choices” and “making progress.”

She said: “I know that not enough working people are yet feeling that progress, and that’s what tomorrow’s spending review is all about — making working people better off, investing in our security, investing in our health, investing in our economy.

“This government is going for growth because that is the best way to create jobs, boost wages, lift people out of poverty, and sustainably fund our schools and our hospitals and all the public services we rely on.

“And we’re doing things differently, because unlike the Tories, I don’t think that the only good thing that a government can do is get out of the way.”

Defending her welfare cuts, Ms Reeves claimed the present system was “not sustainable” and her reforms were about helping people with disabilities get back into work.