Unemployment rises as pay growth slows again
Getty ImagesOfficial data showed that Britain’s unemployment rate rose, while wage growth continued to slow.
The unemployment rate was 4.3% in the three months to September, up from 4% in the previous quarter.
However, Office for National Statistics (ONS) urges caution Too much emphasis is placed on the latest employment data due to problems with the way the data is collected.
Although wage growth has slowed, wages are still rising faster than inflation, a measure of how fast prices are rising.
Excluding bonuses, annual salary growth between July and September was 4.8%, the lowest in more than two years.
The number of vacancies has also fallen again, as has been the case for more than two years.
Liz McKeown, director of economic statistics at the ONS, noted that the total was still slightly above pre-pandemic levels.
She told the BBC’s Today program that the latest data showed “the labor market continues to ease”.
But the ONS Labor Force Survey, which provides UK employment data, has had fewer than normal numbers of respondents over the past year, raising concerns about its reliability.
The Bank of England pays close attention to employment data when making interest rate decisions.
Last week, the central bank cut interest rates for the second time this year, with inflation running 1.7% below its 2% target.
The latest ONS figures are supported by anecdotal reports that some businesses already facing rising costs have paused recruitment ahead of the Budget.
Supermarkets include Asda and Sainsbury’s High street giant Marks and Spencer said it would increase its national insurance contributions (NIC) from April under measures outlined in Chancellor Rachel Reeves’ first budget. minimum wage, they face sharply rising costs.
The tax hikes have led to concerns among businesses that they may have to cut hiring, limit employee wage increases or raise prices.
While public sector pay awards awarded by the government will be reflected in official data for the rest of the year, economists have warned that the upcoming increase in employer NICs could squeeze private sector wages.
Alexandra Hall-Chen, chief employment policy adviser at the Institute of Directors, said measures in the Employment Rights Act and tax increases had “significantly affected hiring intentions”.
“The cumulative effect of these changes will ultimately depress job creation… (the government) needs to urgently address business concerns about the increased risks and costs associated with employing staff,” she added.
Another recent survey by the Federation for Recruitment and Employment and consultancy KPMG showed job vacancies had fallen for the 12th consecutive month, indicating less demand for workers.
But Rob Wood, chief UK economist at Pantheon Macroeconomics, said the BoE would focus on big trends rather than the ONS’s “small data omissions” when weighing up its next interest rate decision. “.
“The unemployment rate is likely to gradually increase and the labor market is easing but remains tight,” he said. “Similarly, wage growth is gradually moderating but remains too high to enable inflation to sustainably reach target.”
Other economists said they did not believe the latest ONS data would prompt the Bank to choose another rate cut in December.
Work and Pensions Secretary Liz Kendall said “more needs to be done to improve living standards”.
The Labor MP said three million lowest paid workers will benefit from an increase in the minimum wage, officially known as the National Living Wage, from April.
