UK Unemployment Rises to 5%: Economy Shows Signs of Strain

The labour market weakens, fuelling speculation of a December rate cut.

The UK’s unemployment rate has climbed to 5% in the three months to September — the highest since early 2021 — according to new figures from the Office for National Statistics (ONS).
The increase, higher than analysts’ forecast of 4.9%, has sparked expectations that the Bank of England may lower interest rates when its Monetary Policy Committee meets on 18 December.

Average wage growth slowed slightly to 4.6%, while payroll data showed 180,000 fewer people employed compared to last year.
The ONS said the figures signal a “weakening labour market”, with a growing number of young people not working or studying.

Job vacancies rose slightly to 723,000 — the first rise in over three years — but remain far below the 2022 peak.
Public sector wages grew by 6.6% compared with 4.2% in the private sector, as government budget constraints begin to bite.
Small businesses are reportedly shelving hiring plans, worried about higher taxes and regulatory burdens, casting further uncertainty over the UK’s fragile recovery.