The unemployment rate rose to 4.3% in the three months to September, up from 4% in the previous quarter. Pay growth also slowed, with wages (excluding bonuses) increasing at an annual rate of 4.8% between July and September – the slowest rise in over two years. However, wages are still rising faster than inflation, which is 1.7%.
The Office for National Statistics (ONS) has cautioned against relying too heavily on its latest figures due to data collection issues in its Labour Force Survey, which has faced a decline in respondent numbers. This has raised questions about the survey’s reliability in accurately reflecting the job market.
Vacancy numbers continued their two-year decline, with many businesses reportedly pausing hiring in response to cost pressures and recent tax hikes announced in the Budget. Supermarkets such as Asda, Sainsbury’s and Marks & Spencer have reported significant cost increases due to rising national insurance contributions and the upcoming minimum wage hike in April.
Businesses fear these tax increases could lead to reduced hiring, limited wage growth and potentially higher prices. While public-sector pay awards will influence wage figures over the coming months, some economists doubt the Bank of England will introduce further rate cuts in December, despite the recent data.
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