- Unemployment jumps to 5.1% in three months to October – the highest since 2021
- Payroll numbers fell by 38,000 in November
- Average wage growth slows to 4.6% in three months to October
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK jobs figures:
“Businesses and lobby groups warned that the double whammy of increased labour costs imposed during the last Budget would force them to think carefully about their hiring intentions.
“Changes to employer National Insurance and the increase in the National Living Wage simply made it more expensive to have employees on the books, and though the government has now adopted a more pragmatic approach when it comes to the Employment Rights Bill, its passage through parliament has made some employers hesitate to take on new workers.
“Getting that first job has become increasingly difficult, with businesses less likely to take a punt on fresh faces as costs have increased.
“Add in all the instability caused by months of speculation about what might be in this year’s Budget, which saw growth vanish and confidence undermined, and there will be few people surprised by today’s data showing that unemployment has hit a high not seen since the height of the pandemic.
“This period is slap bang in the middle of what is often referred to as the ‘golden quarter’, the period when retailers and hospitality businesses bring in thousands of seasonal workers to help them cope with a festive boom.
“But nerves about potential tax hikes have pushed many people to press pause on their Christmas planning. Whilst some will be exhaling after what was a relatively benign Budget for business, the hospitality sector is bracing itself for increased business rates, with warnings that many may struggle to keep the doors open.
“There is a sliver of silver lining the black clouds that have been gathering on the horizon. Wage growth slowing further should enable UK rate setters to deliver an interest rate cut later this week. But for younger workers in particular, the current state of the labour market will be disheartening, demoralising and dispiriting.”
