- Unemployment rises to 5% in the three months to September – the highest level since May 2021
- Average regular earnings growth slowed to 4.6%
- Vacancy numbers held firm after steady declines from mid-2022
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK jobs figures:
“There’s been a lot of talk about the reliability of ONS jobs data but when you consider a host of business surveys, earnings updates from recruitment companies, payroll numbers from HMRC and concerns about a reduction in hiring from the Bank of England, it’s hard to see anything but a clear picture of a faltering labour market.
“A lot of blame will be placed on the chancellor’s decision at the last Budget to hike national insurance for businesses whilst simultaneously upping the national living wage. That tax on jobs has undoubtedly forced some businesses to pare back their workforce or to reconsider hiring more staff, at least until the dust settles on the upcoming Budget.
“Looking at the increase in redundancies over the three months to September tells you a great deal and partly dispels the notion that the jobs rout was stabilising, especially when you factor in falling payroll numbers.
“That relentless fall in job vacancies has finally been arrested, perhaps thanks to a seasonal uptick as firms take on staff for the Christmas period. But the number of unemployed people per vacancy now stands at 2.5 – a level not seen outside the pandemic since 2015.
“The increased cost of employing people has pushed many firms to consider new ways to deploy technology, either through automation or by investing in AI, which one-in-six firms told the CIPD they expect will lead to further job cuts next year. And with a softening labour market the pressure on firms to offer staff bumper pay increases has abated and earnings growth has slowed, particularly in the private sector.
“Market expectation of a December rate cut has jumped to over 70% on today’s jobs figures, though until we see all the chancellor’s workings in black and white, no one is taking anything for granted.”
