UK unemployment has risen to its highest level since the 2021 lockdown, while wage growth has cooled to its weakest pace in more than three years, according to the latest data from the Office for National Statistics (ONS).
The figures, released on Tuesday, show the unemployment rate increased to 4.8% in the three months to August, up from 4.7% in the previous quarter — the highest reading since the three months to May 2021. A single-month estimate put joblessness even higher, at 5.3%, marking the steepest rise since October 2020.
At the same time, regular pay (excluding bonuses) rose by 4.7%, its slowest pace since early 2022, while total pay growth (including bonuses) edged up slightly to 5%. The ONS said that while earnings growth remains well above pre-pandemic norms, momentum has clearly weakened in recent months.
The combination of higher unemployment and softer pay growth will provide some comfort to policymakers at the Bank of England, who have been concerned that wage pressures are fuelling persistent inflation.
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