LONDON, Dec 16 (Reuters) – Britain’s jobs market showed further signs of weakening in the run-up to last month’s budget announcement by finance minister Rachel Reeves, as official data on Tuesday showed fewer people in work and private sector wage growth slowing.
With the Bank of England already expected to cut interest rates on Thursday to help a slowing economy, the data showed the jobless rate rose to 5.1% in the three months to October from 5.0% in the third quarter – the highest since the three months to January 2021.
Britain’s unemployment rate is based on a survey that is in the process of being improved by the Office for National Statistics. But there was other evidence of a slowdown in the labour market in Tuesday’s figures.
Annual pay growth in the private sector, excluding bonuses, slowed to 3.9% in the three months to October, its weakest since the end of 2020, from 4.2% in the three months to September.
Public sector wage growth accelerated to 7.6% from 6.6%, reflecting wage deals that kicked in earlier this year than in 2024, the ONS said.
The pace of overall regular wage growth stood at 4.6%, slowing from an upwardly revised 4.7% in the third quarter. A Reuters poll of economists had shown a median forecast of a slightly weaker 4.5% increase.
A measure of payrolls data provided by the tax office showed a monthly drop of 38,000 in November. A fall of 32,000 first reported for October was revised to show a decline of 22,000 people in payrolled employment.
The pound briefly rose against the dollar and the euro immediately after the data was published before falling back.
Financial markets are almost fully pricing a quarter-point rate cut by the BoE on Thursday and investors are watching closely for any signals from the central bank about the outlook for monetary policy 2026.
Inflation data, due on Wednesday, is expected to show the main gauge of price growth in Britain slowed to a 3.5% increase in November from a 3.6% rise in October, but still almost double the BoE’s 2% target.
(Reporting by William Schomberg; Editing by Kate Holton and David Milliken)
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