UK Wage Growth Accelerates While Unemployment Edges Higher

A rise in pay growth and jobless rates complicates economic policy decisions as businesses face tax increases and a cooling labor market.

The Office for National Statistics reports a 5.6% annual increase in average weekly earnings for the three months to November, up from 5.2% in the previous period.
The UK unemployment rate rose to 4.4% during the same period, reflecting a slight softening in the labor market.
Payrolled employment dropped by 47,000 in December, the largest decline since the pandemic, with job vacancies falling for the 30th consecutive month.
Economists suggest that recent wage growth may be temporary, as businesses face higher costs from tax measures and reduced hiring intentions.
The Bank of England is weighing interest rate cuts, with a decision expected on February 6, but robust pay growth could sustain inflationary pressures.