The rate of UK unemployment remained unchanged at 4.3 per cent in the three months to October, the Office for National Statistics said.
UK average regular earnings growth also rose to 5.2 per cent in the three months to October and was three per cent higher after taking inflation into account.
The UK economy grew in the first part of this year, but shrank in September and October, according to the latest growth figures. Restaurants, pubs and retail – sectors which rely on lower-waged staff – reported weaker months, officials statistics showed.
On Tuesday the latest official jobs figures will showthe UK’s unemployment rate has steadied and continued into October.
While still moderate by historical standards, unemployment ticked up to 4.3 per cent in September, compared to four per cent in the period March to May.
The private sector has also stalled over the last month, according to a closely watched survey, raising fears that the economy is edging closer to recession.
Rising employment costs from Rachel Reeves’s decision to increase business taxes in her first budget, along with soft consumer demand, have led UK companies to cut numbers at the fastest rate since the pandemic.
James Reed said his firm had noticed a sharp fall in the number of jobs being advertised and urged the government to rethink the recent increase in the tax employers pay on staff wages.
He said: “We’re like the crow’s nest on a ship. We get the vacancies coming into our website early, so we see what’s happening in the labour market.”
The Government said it had faced “difficult decisions” but that official forecasts suggested employment would rise over the next three years.
The latest flash composite purchasing managers’ index (PMI) from S&P Global was unchanged in December at 50.5, below expectations and just above the 50-point threshold that indicates stagnation.
Economists at Capital Economics, a consultancy, said the survey was consistent with a “0.3 per cent quarter-on-quarter contraction in the fourth quarter”. A recession is regarded as two quarters of negative growth.
However, it noted: “That said, we doubt the economy will be quite as weak as that, given the PMIs do not capture rises in government spending.”
Additional details of the report showed that the number of people claiming jobless benefits climbed by only 0.3K in November, compared with a decrease of 10.9K in October, beating the expected 28.2K figure.
Joe Nellis is economic adviser to MHA said: “The unemployment rate holding steady at a relatively low 4.3 per cent is not a significant cause for celebration, as the long-standing problems in the UK’s labour market continue to undermine attempts to reignite a flatlining and underperforming economy.
“The major problem concerns the stubbornly high number of adults classified as ‘economically inactive’ – those between the ages of 16 and 64, not in employment but not in search of paid work. This number has remained at well over nine million in recent years and makes up over 20 per cent of the UK’s working age population.
“To create the conditions for a growing economy, the Government will need to encourage and help them return to the workforce to expand the country’s productive power.”
Nellis explained that to support the return of many of these people into work, the Government will need to invest at a much faster rate in skills (training and re-training), as well as incentivising work by advocating good working conditions and a fair day’s wage for a fair day’s work.”
