Unemployment rises as pay growth slows again

The UK's unemployment rate has risen, official figures suggest, while pay growth continues to slow.

The rate of unemployment stood at 4.3% in the three months to September, up from 4% the previous quarter.

However, the Office for National Statistics (ONS) urged caution over giving too much weight to its latest jobs figures due to issues with how it gathers the data.

While wage growth has eased, pay is still rising faster than inflation, which measures the rate of price increases.

Excluding bonuses, pay grew at an annual rate of 4.8% between July and September - the lowest in more than two years.

The number of vacancies also fell again, as they have been doing for more than two years now.

The Bank of England closely watches the jobs data when making decisions on interest rates.

It cut rates for the second time this year last week, with inflation below its 2% target at 1.7%.

Ms McKeown said the ONS recognised that issues with its numbers were affecting the central bank, and that it was working to improve it as quickly as possible.

The latest ONS figures are supported by anecdotal reports that some businesses, already facing higher costs, paused hiring ahead of the Budget.

Supermarkets including Asda and Sainsbury's and High Street giant Marks and Spencer have said they face a steep rise in costs as a result of the hike in National Insurance contributions (NICs) and increases to the minimum wage from April under measures outlined in Chancellor Rachel Reeves' first Budget.

The tax rises have led to concerns from businesses that they might have to cut back on hiring, restrict wage increases for staff, or raise prices.

While public sector pay awards granted by the government will feed through to official figures over the rest of the year, economists have warned the forthcoming rise in employers' NICs could squeeze those in the private sector.

Alexandra Hall-Chen, principal policy adviser for employment at the Institute of Directors, said that the measures in the Employment Rights Bill and tax rises were "taking a serious toll on hiring intentions".

"The cumulative effect of these changes will ultimately be to stifle job creation... [the government] needs to urgently address business' concerns about the increased risks and costs associated with employing staff," she added.

Sign up for our Politics Essential newsletter to read top political analysis, gain insight from across the UK and stay up to speed with the big moments. It’ll be delivered straight to your inbox every weekday.