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

Donald Trump signs an executive order imposing tariffs on imported goods

'Liberation Day' explained: What are Trump's tariffs and how will they impact the UK?

The blurry thieves stole £3,000 worth of cigarettes and vapes.

Police release CCTV after thieves steal £3,000 of vapes - but images leave the public calling for 'the ghostbusters'

Julie Goodyear

Julie Goodyear's husband shares rare photo of Coronation Street star two years on from dementia diagnosis

: An aerial view shows the scorched graveyard around a church following a large blaze the previous day, on July 20, 2022 in Wennington, Greater London

Londoners urged not to have barbecues this weekend amid soaring temperatures 'because of wildfire risk'

Lord Sugar labels Trump tariffs 'a disaster' as Apprentice star teases potential US Presidential meeting

Lord Sugar labels Trump tariffs 'a disaster' and warns that the president 'hasn't thought it through'

Mother and two children struck and killed by a vehicle in Brooklyn, New York: driver operating suspended license

Husband left 'utterly bereft' after Brit mum and two daughters killed in New York car crash

The Nintendo Switch 2 will release on June 5, 2025

Nintendo Switch 2: Exciting reveal, but why is it more expensive here?

BRITAIN-FUNERAL-POLICE

Funeral director charged with 64 offences including fraud, theft and preventing 30 lawful burials

swallow-tail

Brits urged to 'stop mowing lawns' amid 'national butterfly crisis' with more than half of species in decline

Kyle Kitchen, 38, murdered eight-week-old Primose Kane

Dad who murdered daughter by violently shaking her as baby is jailed for life

Buildings that were destroyed during the Israeli ground and air operations in Gaza

Israel expands ground attack on Gaza to seize 'large areas' - despite pleas from hostage families

Douglas Clifton Brown, 56, tried to kill his estranged wife

Old Etonian who tried to murder his estranged partner by throwing her down a 240ft well is jailed for 24 years

Kaliyah Coa, 11, was reportedly down at the water when she was 'swept away'

Pictured: Missing 11-year-old 'swept away' while paddling in the River Thames

Hot cross buns could be scarce this Easter as farmers continue to protest against Rachel Reeves' 'tractor tax'.

Hot cross bun shortage looms as farmers escalate 'tractor tax' protests

Tanesha Melbourne-Blake was shot

Teenage girl shot dead during gang 'ride-out' following social media humiliation

Mother and two children struck and killed by a vehicle in Brooklyn, New York: driver operating suspended license

Brit mum and daughters, eight and five, killed in crash by driver who said 'I have the devil in me'