The result was the UK’s largest increase in its unemployment rate on record. It shot up to 5% in the three months to September, according to the Office for National Statistics (ONS). This marks the worst unemployment rate we’ve experienced since December 2020 to February 2021. More importantly, it points to a seismic shift in the jobs market.
Analysts had predicted the unemployment rate to reach 4.9% prior to next month’s Budget pronouncement on November 26. Yet, the real increase has come in higher than their forecasts. Nationally, the ONS reported a loss of 109,000 payrolled employees in the course of the yr. That’s a decrease of 0.4% over that time. This sharp drop in employment is another sign, along with many other labour indicators, that the labour market is starting to crack up.
The ONS has in fact recorded a semi-embarrassing stability in job vacancies, even as unemployment has begun rising. Between August and October, there were an average of 723,000 job openings. After accelerating over the first half of this year, average wage growth slipped a notch in the third quarter. That’s a decrease from 4.7% in the prior three months.
We spoke to director of economic statistics for the ONS Liz McKeown to understand what’s going on right now.
“Taken together, these figures point to a weakening labour market. Meanwhile, the unemployment rate is up in the latest quarter to a post-pandemic high. The number of job vacancies, however, remains broadly unchanged.” – Liz McKeown, ONS
Pat McFadden focused on some good news in the labor market, noting that,
“Over 329,000 more people have moved into work this year already, but today’s figures are exactly why we’re stepping up our plan to get Britain working.” – Pat McFadden
On the employment front, recent data indicates that these efforts are starting to make some strides. Yet, the big picture on the UK labour market is one of uncertainty. Analysts will be watching these trends carefully as the federal government heads into its next budgetary deliberations.