UK unemployment rate steady, pay growth picks up

The UK unemployment rate was steady in the three months to October, while pay growth picked up, according to figures released on Tuesday by the Office for National Statistics.

The unemployment rate came in at 4.3%, unchanged from the previous month.

Meanwhile, average pay, including and excluding bonuses, rose 5.2%. This compares to 4.9% growth for regular earnings in the previous three months, and 4.4% for total earnings.

The data also showed that vacancies fell by 31,000 on the quarter to 818,000 in September to November 2024. This marked 29 months of consecutive falls but they are still higher than before the pandemic.

Liz McKeown, director of statistics at the ONS, said: "After slowing steadily for over a year, growth in pay excluding bonuses increased slightly in the latest period, driven by stronger growth in private sector pay. Pay growth including bonuses increased by more, but this reflects previous figures being affected by the one-off payments made to some public sector employees in 2023.

"The number of people on payrolls grew slightly in October, but we have seen annual growth rates continue to slow, showing a consistent trend with our latest jobs data from employers. The number of job vacancies has also fallen again, though the total remains a little above where it was before the pandemic."

Private sector pay growth rose from 4.9% to 5.4%.

Ashley Webb, UK economist at Capital Economics, noted that’s a much bigger and faster rise than the Bank of England’s prediction of 5.1% by the fourth quarter in its November Monetary Policy Report.

"Overall, today’s data release will do little to shift the Bank’s focus away from worrying about high inflation to more towards worrying about weak activity and leaves it looking even more likely that the Bank will keep interest rates on hold at 4.75% on Thursday," he said.

"That will especially be the case if tomorrow’s data release shows that CPI inflation rose further than the Bank expected in November as we anticipate."