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1h ago

UK Unemployment Rises to 5% as Payrolls Fall, Underscoring Labour Market Weakness

The softer jobs and pay figures increase pressure on Rachel Reeves ahead of the 26 November budget.

People walk alongside a Job Centre Plus in London, Britain, October 25, 2023. REUTERS/ Susannah Ireland
The unemployment rate is the highest since the three months to February 2021, when the UK was in the third pandemic lockdown
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Overview

  • HMRC data show payrolled employment dropped by 32,000 in October, taking the year-on-year fall to roughly 180,000.
  • Average regular pay growth eased to 4.6% in July–September, leaving real wages up 0.8%, with private-sector growth slowing and public-sector pay stronger.
  • ONS reported vacancies were broadly unchanged and said payrolls have fallen in most of the past 12 months, with the latest two-month decline the largest since late 2020.
  • London recorded the highest regional unemployment at 6.5%, and about 1.79 million people are unemployed across the UK.
  • Analysts and market pricing indicate the weaker data increase the likelihood of a Bank of England rate cut in December, subject to inflation releases and the budget.