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Britain’s job market shows signs of further weakness in last month’s gains Budget As official data has shown, the unemployment rate has reached its highest level since the beginning of 2021 and young people are the most affected.
National Statistical Office (ONS) said the unemployment rate rose to 5.1% in the three months to October, from 5% in the three months to September.
This is the highest since the first quarter of 2021 at the peak of the pandemic, but outside covid era, this is the highest since the beginning of 2016.
The ONS said average regular pay growth also bounced back, rising to 4.6% in the three months to October, down from a revised 4.7% in the previous three months, and 0.9% higher after taking into account consumer price index (CPI) inflation.
Economists said uncertainty ahead of the Nov. 26 budget weighed on the jobs market, less than a week after the economy posted an unexpected 0.1% contraction in October, attributed to concerns over what measures should be taken. chancellor Will announce.
Rob Wood, chief UK economist at Pantheon Macroeconomics, said: “Budget chaos has hit job growth over the past few months as companies have delayed decisions.”
Sanjay Raja, chief UK economist at Deutsche Bank Research, said: “As we approach Christmas, there continue to be worrying signs in the labor market.
“Peak budget uncertainty hits hiring plans.”
But experts said the moderation in wage growth would help strengthen the case for the Bank of England to cut interest rates from 4% to 3.75% when it decides on Thursday, as it would help policymakers ease fears of long-term inflationary pressures.
The latest ONS figures provisionally estimate that the number of employees on payrolls fell by 38,000 during November – the biggest fall in five years – to 30.3 million in evidence of a weak jobs market.
The ONS said young people are struggling in a tough recruitment environment, with the number of unemployed 18 to 24-year-olds rising by 85,000 in the three months to October – the biggest rise since November 2022.
Unemployment for those aged 25 to 34 rose by 47,000, while it was 28,000 higher for those aged 16 and 17.
The number of young people without employment, education or training – the so-called NEET – has been rising since 2021, and the current level is the highest since 2014.
Work and Pension Secretary Pat McFadden Said: “More than 350,000 people are out of work this year and inactivity rates are the lowest combined in five years, but today’s figures underline the scale of the challenge we have inherited.”
“To move forward and tackle the deep-rooted issues of our labor market, Alan Milburn is also leading an inquiry into the whole issue of young people’s inactivity and underwork,” he said.
The data also showed that vacancies fell slightly between September and November, falling by 2,000 to 729,000, while the number of people made redundant also rose by almost 50% to 156,000.
Martin Beck, chief economist at WPI Strategy, said: “The latest UK labor market data delivered a fresh set of worrying signals suggesting that the long-running downturn is still underway.
“With employment and wage growth continuing to decline under pressure from a fragile economy, the data will provide the Bank of England’s Monetary Policy Committee with yet another reason to support an interest rate cut this week.”
Wednesday’s inflation data is also being considered key to the bank’s decision, with economists expecting it to decline from 3.6% in October to 3.5% last month.