Unemployment has hit its highest level for almost a decade as official figures shows in the three months to September the rate of those out of work rose to 5%, up from 4.8% in the three months to August.
The Office for National Statistics (ONS) said taking out the unemployment during Covid, this was the highest level since August 2016.
Martin Beck, WPI Strategy chief economist, said, “With pay growth slowing further, the data strengthen the case for the Bank of England to cut interest rates next month.”
He warned the “prospect of new tax rises in the upcoming Budget poses further risks to employment, particularly if the Chancellor again looks to raise taxes on businesses”.
Beck added, “But this time, Rachel Reeves is more likely to target earners rather than employers.”
“Signs of renewed weakness in the UK labour market suggest the real economy is starting to feel the chill of Budget tax uncertainty,” Beck continued.
ONS director of economic statistics Liz McKeown said, “Taken together these figures point to a weakening labour market.
“The number of people on payroll is falling, with revised tax data now showing falls in most of the last 12 months.”
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