Key points:
- Payrolled employment fell again in October, while the unemployment rate rose to 5%.
- The figures strengthen the case for the Bank of England to lower interest rates in December.
The latest official figures point to a cooling UK labour market, with payrolled employment falling again, unemployment rising to its highest since early 2021 at 5%, and wage growth continuing to ease. That said, vacancies were broadly stable in the three months to October, halting a more than three-year decline.
Employers remain tentative ahead of a Budget that’s likely to bring significant tax increases, with many continuing to be cautious on hiring until they get greater visibility on the policies to be announced.
The door remains open to a Bank of England interest rate cut in December, with downside risks to the economy and job market now predominating. Wage growth remains strong at 4.6% year-on-year for regular pay, but is easing gradually, helping temper concerns about inflation persistence.
Today’s data strengthens the case for Governor Bailey, swing voter at November’s meeting, to side with the doves and vote to lower borrowing costs before year-end.
