11th Nov 2025 07:29
(Alliance News) - The UK unemployment rate rose to 5.0% in the three months to September, its highest since early 2021, as the job market continued to soften, official data showed Tuesday.
The Office for National Statistics said the jobless rate for people aged 16 and over increased from 4.8% in the previous quarter and from 4.2% a year earlier.
The last time UK unemployment was at 5.0% was in the three months to February 2021, and it has remained below that level ever since.
The increase could renew hopes for an interest rate cut from the Bank of England, as signs of cooling in the labour market add to evidence that inflationary pressures are easing.
The ONS said the number of payrolled employees fell by 117,000, or 0.4%, between September 2024 and September 2025, and decreased by 32,000 between August and September. The early estimate for October showed a larger annual drop of 180,000 employees, bringing total payrolled employment to 30.3 million.
The employment rate among people aged 16 to 64 slipped to 75% in the three months to September, down on the quarter but higher than a year ago.
Economic inactivity held steady at 21%.
Vacancies were broadly unchanged, rising by just 2,000 to 723,000 in the August to October period.
The number of people claiming unemployment-related benefits rose on the month to 1.7 million in October, though it was lower than a year earlier.
Wage growth slowed but continued to outpace inflation. Regular pay, excluding bonuses, grew by 4.6% in the three months to September, slowed from 4.7% in the prior three-month period. Total pay including bonuses rose by 4.8%, decelerated from 5.0%.
Adjusted for inflation, regular pay increased by 0.5% using the CPIH measure and by 0.8% using the CPI measure.
The ONS said pay growth was 4.2% in the private sector and 6.6% in the public sector, though it noted that some early pay settlements in 2025 inflated the annual rate.
The ONS said the decline in employment reflected a gradual weakening trend since 2022, following the post-pandemic rebound. "Employee growth began a slight downward trend around early 2019," the agency said. "From April 2022, the annual growth rate has been falling steadily."
By Eva Castanedo, Alliance News reporter
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.