UK jobless rate rises to 3.6% as vacancies fall again

Britain’s unemployment rate unexpectedly rose in the three months to September and vacancies fell for a fifth report in a row as employers worried about the outlook for the economy, official data showed on Tuesday.

With finance minister Jeremy Hunt set to raise taxes and cut spending on Thursday to fix the public finances, potentially deepening an expected recession, the jobless rate rose to 3.6 per cent, pushed up by a rate of 3.8 per cent in September alone.

Economists polled by Reuters had expected the unemployment rate to remain at 3.5 per cent.

The number of people in employment fell by 52,000 in the July-to-September period, the Office for National Statistics said, a bigger decline than the median forecast in the Reuters poll for a 25,000 drop.

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The number of job vacancies in the August-to-October period fell to 1.23 million, its lowest since late 2021 but still high by historical standards, underscoring the problems facing many employers struggling to fill their empty roles.

The Bank of England fears that Britain’s shrinking labour market will add to inflation pressures, forcing it to raise interest rates even as the economy heads into an expected recession.

However, the share of people classed as inactive – neither in work nor looking for it – fell to 21.6 per cent from 21.7 per cent in the three months to August.

Wages excluding bonuses rose by 5.7 per cent, their highest annual growth rate since the three months to August 2021. The Reuters poll had pointed to a smaller increase of 5.5 per cent.

Including bonuses, wages rose by 6.0%, compared with the poll forecast of 5.9 per cent.

But wages are rising by far less than inflation which is expected to have hit 10.7 per cent in data due on Wednesday.

The ONS said both its measures for wages, adjusted for the consumer price index, were down by almost 4 per cent. – Reuters