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

Zelensky promises 'serious response' following Russia's use of new hypersonic missiles

Zelenskyy promises 'serious response' following Russia's use of new hypersonic missiles

Russia has said it will begin mass production on an "unstoppable" missile.

Russia to begin mass production of 'unstoppable' ballistic missile, Putin warns as Zelensky urges 'serious response'

The Met could lose 2,000 officers

Met Police could lose 2,000 officers as force's budget 'may be slashed by £450 million'

Mixed martial arts fighter Conor McGregor (centre) and partner Dee Devlin leave the High Court in Dublin after the personal injury case against him.

Conor McGregor vows to appeal decision after civil jury finds he raped woman in hotel

The new advert was published this week.

Jaguar bosses hit back at ‘vile hatred and intolerance’ following new rebrand

UK prisoners could be sent to Poland after new talks.

'Detailed prison maps' leak on dark web as fears grow of jail escapes

Two detained following Gatwick Airport bomb scare as police 'ramp up presence' in terminal

Two detained following Gatwick Airport bomb scare as police 'ramp up presence' in terminal

Mixed martial arts fighter Conor McGregor (centre) and partner Dee Devlin leave the High Court in Dublin after the personal injury case against him.

Conor McGregor raped woman in hotel, civil jury finds, as she is awarded damages

Donald Trump

Donald Trump hush money sentencing postponed as judge says president-elect can seek dismissal

Hostel at centre of 'mass methanol poisoning' offered free shots in exchange for good reviews, backpacker claims

Hostel at centre of 'mass methanol poisoning' offered free shots in exchange for good reviews, backpacker claims

Parents of British lawyer killed in Laos 'mass methanol poisoning' pay tribute to 'kind and loving daughter'

Parents of British lawyer killed in Laos 'mass methanol poisoning' pay tribute to 'kind and loving daughter'

Queen Camilla to miss Royal Variety as she continues recovery following chest infection

Queen Camilla to miss Royal Variety as she continues recovery following chest infection

Gatwick South Terminal to reopen after bomb scare but passengers still face flight delays and cancellations

Gatwick South Terminal reopens after bomb scare but passengers still face flight delays and cancellations

London, UK. 22nd November 2024. Police cordon and firefighters on the scene at the Embassy of USA in London following a controlled explosion of a suspicious package. Credit: Vuk Valcic/Alamy Live News

Police say US embassy 'suspect package' was probably a hoax after carrying out controlled explosion

Many Britons again faced freezing temperatures overnight

Brits brace for Storm Bert: Met Office issues amber weather warning for snow - with up to 40cm set to fall

Harshita

'We will never forget you till our last breath': Family of Harshita Brella pay tribute - as manhunt continues for killer