UK unemployment rate ticks higher
By Abigail Townsend
Date: Tuesday 13 Dec 2022
(Sharecast News) - The number of people unemployed ticked higher in October, official data showed on Tuesday, as real term wages fell.
According to the Office for National Statistics, the jobless rate rose 0.1 percentage point in the three months to October, to 3.7%.
Growth for both average total pay - which includes bonuses - and regular pay, which excludes them, was 6.1% over the three months, the strongest increase outside of the pandemic period. However, once adjusted for inflation, total and regular pay both fell in real terms by 2.7% year-on-year. The ONS said the fall was among the largest since comparable records began in 2001.
Average regular pay growth for the private sector was 6.9%, and 2.7% for the public sector.
The ONS said that 417,000 working days were lost because of labour disputes in October, the highest since November 2011. Another wave of industrial action gets underway this week, with rail workers, nurses and postal staff all due to strike over pay and working conditions.
The ONS data also showed an uptick in the employment rate, however, which rose 0.2 percentage points to 75.6%. The number of employees increased during the period, while the number of self-employed fell.
The economic activity rate also fell, declining by 0.2 percentage points to 21.5%, which the ONS said was driven by people aged 50 to 64.
Sam Beckett, deputy chief executive at the UK Statistics Authority, told the BBC: "There are some signs that the job market could be softening a little. The number of vacancies has been coming down for five months running now."
Kitty Ussher, chief economist at the Institute of Directors, said: "The labour market has now turned. While unemployment is still thankfully very low by historical standards, it has started to march upwards.
"The Bank of England therefore needs to pause for thought before continuing its aggressive path of interest rate rises."
The Monetary Policy Committee's latest decision on interest rates is due on Thursday. Ussher said: "On balance, a slight and cautious rise is probably justified, until it becomes clear that inflation is on a firm downwards path. Anything more would risk over shooting their medium term targeting, causing unnecessary pain."
Alex Livingstone, head of trading, FX and ETF, at Titan Asset Management, said: "Looking ahead the UK labour market faces series challenges as the BoE looks to hike rates later this week and further into next year, with business sentiment remaining weak. I expect these core macro principles of weaker growth in the UK to feed through to higher unemployment data in the new year."
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