Unemployment in the UK has risen by more than expected to the highest level in four years, official figures show, amid a worsening slowdown in the jobs market before Rachel Reeves’s autumn budget.
With under three weeks to go before the chancellor’s tax and spending statement, figures from the Office for National Statistics (ONS) show the headline unemployment rate rose to 5.0% in the three months to the end of September, up from 4.8% in the previous quarter.
City economists had forecast an increase to 4.9%. The official headline unemployment rate was last higher in the first quarter of 2021, during the height of the Covid pandemic.
Liz McKeown, the ONS director of economic statistics, said: “These figures point to a weakening labour market.”
The ONS’s figures are based on its widely criticised labour force survey, which has suffered from collapsing response rates. Experts have argued this leaves policymakers “flying blind”, risking decisions being taken based on flawed data.
However, separate data suggests the jobs market has slowed sharply, as employers come under pressure from tax increase, stubborn inflation, elevated borrowing costs and a sluggish growth outlook.
Figures from HMRC published on Tuesday showed the number of workers on company payrolls fell by 32,000 in October, compared with September.
Reeves is expected to raise taxes in the budget to plug a shortfall in the government finances of up to £30bn. However, business leaders have warned doing so could hit jobs and growth.
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