UK Unemployment Rate Highest Since 2021

(RTTNews) - The UK unemployment rate increased to the highest since early 2021 in the third quarter, raising chances of an interest rate cut, official data revealed on Tuesday.

The ILO jobless rate rose to 5.0 percent in the third quarter from 4.8 percent in the three months to August, the Office for National Statistics said.

The rate was above economists' forecast of 4.9 percent and also the highest since early 2021.

Data showed that average earnings including bonuses grew 4.8 percent from the previous year, which was slower than the expected growth of 5.0 percent.

Excluding bonuses, average earnings climbed at a slower pace of 4.6 percent, in line with expectations, after rising 4.7 percent in the preceding period.

In October, payroll employees decreased 32,000 from the previous month to 30.3 million. The number of job vacancies rose only 2,000 to 723,000 in August to October. There was an estimated 39,000 working days lost because of labor disputes in September, the ONS said.

Although the annual growth in wages including bonuses slowed again, it was still strong and above inflation, British Chambers of Commerce Deputy Director of Public Policy Jane Gratton said.

"This feeds into higher prices, and we expect the Bank of England will be paying close attention to the wage growth trend ahead of next month's decision on interest rates," said Gratton.

Last week, the BoE had decided to hold the interest rate at 4.00 percent in a tight vote and signaled that the rate will follow a gradual downward path if disinflation process continues.