UK unemployment rate rises as wage growth slows

12 November 2024, 08:26

Crowd Of Commuters Walking To Work Across London Bridge.
Crowd Of Commuters Walking To Work Across London Bridge. Picture: Alamy

By Henry Moore

Britain’s unemployment rate rose more than expected as wage growth fell to its lowest level in two years.

Listen to this article

Loading audio...

According to the Office for National Statistics (ONS), the rate of UK unemployment rose to 4.3% in the three months leading to September, up from 4% in the previous three months.

This marks a stark increase from the 4.1% predicted by economists.

Average regular earnings growth eased back to 4.8% in the three months to September, down from 4.9% in the previous three months, the ONS added.

Read more: 'Game changer' stop smoking pill varenicline to be offered by NHS

Read more: Assisted dying bill’s ‘strict’ safeguards include six-month life expectancy and jail time for coercion

This marks the lowest level of wage growth in the UK since June 2022.

Wage growth fell to its lowest level in two years.
Wage growth fell to its lowest level in two years. Picture: Alamy

Liz McKeown, ONS director of economic statistics, said: "Growth in pay excluding bonuses eased again this month to its lowest rate in over two years.

"The number of people on payrolls fell slightly in September and while it remains up on the year, annual growth continues to slow.

"The labour force survey estimates show a different picture, however, we continue to advise caution when interpreting short-term changes in these estimates, as the improvements to data collection introduced at the beginning of the year are still feeding through.

"Job vacancies have fallen again, as they have been doing for more than two years now."

Ben Harrison, Director of the Work Foundation at Lancaster University, said Britain must address its long-term sickness crisis if it wants to get people back to work.

He said: “If the UK Government is to meet its intended 80% employment rate, it must act to address the high levels of long-term sickness that are keeping too many people out of the jobs market. Despite unemployment being at historically low levels, the UK has had over 2.7 million people out of the labour market due to long-term sickness since May-July 2023.

“Taken together, the forthcoming Get Britain Working White Paper and Employment Rights Bill represent a big opportunity to support more people into sustained and secure employment – but only if the Government sticks to its guns on the direction and strength of reforms.

Commuters walk across London Bridge in London
Commuters walk across London Bridge in London. Picture: Getty

“The emphasis must be on de-risking remaining in and returning to work for those with long-term health conditions. That means strengthening the UK’s meagre statutory sick pay system that forces some to work while ill, boosting access to flexible working from day one of employment, and shifting the focus of the welfare system away from punitive sanctions and towards more tailored, long-term employment support.”

Jack Kennedy, Senior Economist at global hiring and matching platform Indeed, added: “The UK labour market continues to gradually cool, with vacancies and wage growth declining further. Though some forecasters have recently upgraded the UK’s growth outlook, the labour market faces several headwinds heading towards 2025 and employers are likely to remain cautious in their hiring decisions.

“While the Bank of England cut interest rates last week, it struck a cautious tone on further reductions. It was already wary of persistent service sector inflation and stubborn wage growth. The potential inflationary impacts of the Budget’s expansionary fiscal measures and possible US trade tariffs under a Trump presidency have reinforced that caution. A slower pace of interest rate cuts could translate into weaker hiring, while the rise in employer National Insurance Contributions announced in the Budget presents a further headwind.”

More Latest News

See more More Latest News

c

Drug traffickers hid £8million worth of cocaine inside foie gras

President-Elect Donald Trump Holds Meetings At His Trump Tower Residence In New York

Trump's envoy suggests Ukraine 'could be divided like postwar Berlin' as part of peace deal

Four men have been jailed for their part in the "callous and shocking" killing in Newham, east London

'Cold-blooded' killers jailed after stabbing drug dealer through taxi window in 'shocking' attack

Lewis Stone, a retired butcher, was on holiday in Borth, Mid Wales, when he was repeatedly stabbed

'Beginning of nightmare' for family of man killed by psychiatric patient in stabbing - as attacker to be allowed leave

Louis H

Family of man stabbed to death in Leicestershire pay tribute to 'gentle giant' who was 'ripped from us cruelly'

Jesy Nelson has shared a pregnancy update

Jesy Nelson gives pregnancy update from hospital as she shows off growing baby bump

Three people have died after a small plane crashed in near a major interstate highway in Boca Raton, South Florida.

Three dead after plane crash turns to fireball in Boca Raton, South Florida

Teachers have voted to reject the Government’s pay offer of 2.8% for all teachers and leaders in England, the National Education Union (NEU) has said.

Teachers in England vote to reject Government offer of 2.8% pay rise

Twenty recipients of heart transplants and their families pose for a photograph at a celebration event at the Royal Papworth Hospital in Cambridge to mark the 10th anniversary of the first non-beating heart transplant in Europe.

Transplant patients mark 10 years of pioneering surgery with non-beating hearts

Exclusive
x

'It's nothing to do with him': White House aide hits out at Nigel Farage over Trump tariff criticism

It has been revealed that the excursion was a birthday gift for the girl, aged 8, pictured smiling before the helicopter took off.

Pictured: Smiling birthday girl, 8, before helicopter plunged into river killing pilot and family of five

New rules for airports will end check-in queues, remove the need for boarding passes, and stop passengers from having to remove laptops and liquids from bags for security checks.

New airport rules will end check-in, remove boarding passes, and allow passengers to keep liquids in their bags at security

Nick Moran

Harry Potter actor rushed to hospital and is in intensive care after 'major surgery'

"Rush" - World Premiere - Inside Arrivals

Family of Samantha Davis, late wife of Warwick Davis, hope inquest into death will 'provide us with answers'

Strictly Come Dancing professional dancer Amy Dowden has been confirmed as returning for the show's 2025 series after being forced to pull out midway through last year's competition.

Amy Dowden returns to Strictly Come Dancing after injury

James Anderson has been awarded a knighthood in Rishi Sunak's resignation honours list

Ex-England fast bowler James Anderson awarded knighthood in Rishi Sunak's resignation honours