Britain's unemployment rate has climbed to 5 percent in the three months to September, marking the highest level since early 2021. The Office for National Statistics (ONS) reported the increase from 4.8 percent in the previous quarter, exceeding analyst expectations of 4.9 percent.
Wage growth is also slowing. Average regular earnings rose by 4.6 percent in the three months to September, down from 4.7 percent in the previous period. After accounting for inflation, real wage growth stands at just 0.8 percent, the weakest level since April 2022. Meanwhile, the number of workers on UK payrolls fell by 32,000 in October to 30.3 million.
Liz McKeown, director of economic statistics at the ONS, said: «Taken together these figures point to a weakening labour market.» She noted: «The number of people on payroll is falling, with revised tax data now showing falls in most of the last 12 months. Meanwhile the unemployment rate is up in the latest quarter to a post-pandemic high.»
Political Fallout
The figures have triggered political debate ahead of the government's 26 November budget. Work and Pensions Secretary Pat McFadden acknowledged the data, stating: «Over 329,000 more people have moved into work this year already, but today's figures are exactly why we're stepping up our plan to get Britain working.»
Shadow Business Secretary Andrew Griffith said: «At 5% unemployment Labour ministers should hang their heads in shame.» Shadow Work and Pensions Secretary Helen Whately claimed unemployment has risen for 13 consecutive months under the current government, calling it a result of «high-tax, anti-business policies» that are «driving opportunity out of Britain.»
The weakening labor market is likely to concern Bank of England policymakers as they balance inflation concerns against rising unemployment. Economists at the central bank have projected unemployment could peak at 5.1 percent in coming months, above the Office for Budget Responsibility's March forecast of 4.5 percent for 2025.
Note: This article was created with Artificial Intelligence (AI).
