The UK’s jobless rate has risen to a level not seen since late 2020, according to official figures released ahead of the budget.
The Office for National Statistics (ONS) reported a figure of 5% covering the three months to September – up from 4.8% reported last month. It was a larger leap than economists had predicted and the ONS said that men were worst affected by the shift.
It leaves the jobless rate at its highest level since December 2020-February 2021.
It stood at 4.1% when Labour took office last year.
Money latest: How private pensions are treated in divorce
There was no better news for Chancellor Rachel Reeves in wider, experimental, HMRC data released by the ONS, which showed a 32,000 decline in payrolled employment during October.
That suggested a pause to a more recent trend of declines slowing since sharp falls first witnessed in the spring of this year.
Sky News joins police raid on Turkish barbershop – and all is not as it appeared
‘My wife is talking about divorce – she’s due a big inheritance and I’m not, will she still get half my pension?’ | Money blog
Post Office agrees fresh extension to scandal-hit Fujitsu Horizon deal
It was April when measures introduced in Ms Reeves’s first budget came into effect, with hikes in minimum pay and employer national insurance contributions hammering employment and investment sentiment in the private sector.
It also coincided with peak US trade war uncertainty as Donald Trump ramped up his tariffs.
Please use Chrome browser for a more accessible video player
ONS director of economic statistics Liz McKeown said of the data: “Taken together these figures point to a weakening labour market.
“The number of people on payroll is falling, with revised tax data now showing falls in most of the last 12 months.
“Meanwhile the unemployment rate is up in the latest quarter to a post pandemic high. The number of job vacancies, however, remains broadly unchanged.
“Wage growth in the private sector slowed further, but we continue to see stronger public sector pay growth, reflecting some pay rises being awarded earlier than they were last year.”
In good news, the overall slowing in the pace of wage growth and weakening jobs market should help bolster the case for an interest rate cut by the Bank of England next month, assuming inflationary pressures continue to ease after last week’s rate hold.
The ONS figures were released as the clock ticks down to the chancellor’s second budget due on 26 November.
Please use Chrome browser for a more accessible video player
Ms Reeves used an event in Downing Street last week to prepare the ground for a painful series of measures that are expected to be only partly offset by some announcements to keep Labour MPs onside, as she stares down a black hole in the public finances believed to be in the region of £30bn.
She has signalled a break from Labour’s manifesto tax pledge not to raise income tax, national insurance or VAT, on the grounds that the world has changed since that promise was made.
The chancellor’s gripes include Brexit and the effects of the US trade war.
Nevertheless, a spending priority would appear to be the lifting of the two-child benefit cap. That would take an estimated 350,000 children out of poverty, according to the Child Poverty Action Group.
Be the first to get Breaking News
Install the Sky News app for free
Liberal Democrat Treasury spokesperson, Daisy Cooper, said of the employment data: “Surely the writing is on the wall now for the Chancellor’s jobs tax.
“Everyone except Rachel Reeves seems to have woken up to the fact that forcing small businesses to pay more in tax for giving people jobs would damage job opportunities. Now the proof is staring her in the face.
“The Government must reverse their damaging National Insurance hike at the Budget, and commit to saving the small businesses who employ millions in Britain and are at risk of collapse, if they’re to have any hope of reversing today’s concerning trend.”
The Conservatives accused Ms Reeves of presiding over a “high-tax, anti-business” agenda.
The government was yet to respond to the data.
