UNEMPLOYMENT has risen to a four-year high as the UK economy continues to struggle.
The jobless rate reached 4.8% in the three months to August, according to The Office for National Statistics (ONS), as companies continue to slash jobs.
THE ONS released the figures today[/caption]
This is up from last month’s reading of 4.7%, which was amongst the highest the figure has been in four years.
However, the ONS said the latest figure needs to be treated with caution as it continues to overhaul its labour market survey.
Meanwhile, the estimated number of job vacancies in the UK fell by 9,000 on the quarter, to 717,000, in July to September 2025.
Wage growth, for private sector employees, fell to its lowest level in four years.
The figure hit 4.4% over August, while public sector workers saw wage growth rise by 6%.
The rise in public sector pay could be reflected in some pay rises being awarded earlier than they were last year.
Liz McKeown, director of economic statistics, ONS, said: “After a long period of weak hiring activity, there are signs that the falls we have seen in both payroll numbers and vacancies are now levelling off.
“We see different patterns across the age ranges with record numbers of over 65s in work, while the increase in unemployment was driven mostly by younger people.”
The figures come ahead of September’s inflation reading, which is due to be published next week.
The Consumer Price Index remained at 3.8% in the 12 months to August.
The Bank of England is predicting that inflation will rise further this year and should peak at 4% in September, before easing over the next two years.
Shoppers were also told food price inflation rose for the fifth month in a row during the month.
All of these measures will be looked at closely by the Bank of England (BoE) ahead of its monetary policy meeting next month.
Helen Whately MP, shadow work and pensions secretary, said:“The only thing growing under Labour is the unemployment queue and the national debt.
“The Conservatives left office with unemployment at near record lows and the fastest-growing economy in the G7. In just over a year.”
“Labour has killed growth and crushed jobs and livelihoods, with families paying the price.”
“Only the Conservatives have the plan to do the right thing for the next generation by freeing business to create more jobs, drive growth, and deliver a stronger economy built on work, not welfare.”
What it means for your money
Today’s figures come ahead of the Autumn Budget on November 26.
Chancellor, Rachel Reeves is widely expected to raise taxes, but businesses have cautioned the move could harm economic growth.
Reeves is under pressure to fill an estimated £50billion black hole in the public finances ahead of November’s autumn statement.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, also said hikes to National Insurance contributions back in April have left employers cautious about their hiring stance.
She explained: “Some are ramping up redundancies while others are shelving expansion plans or leaving roles unfilled when staff depart.
“Losing a job can deliver a heavy emotional and financial blow. Confidence takes a hit, and the pressure to meet household bills can be overwhelming when future income is uncertain.”
The expert said paying down high-interest debt, refreshing CVs and exploring income protection options are other “smart moves to safeguard financial well-being in uncertain times”.
Unemployment remaining high is bad news for households as it means less people earning money and pumping cash into the economy.
Higher levels of unemployment can also increase the number of those on benefits, piling pressure on people who are in work.
On the contrary, when employment is low it can help boost the economy as households have more money to spend.
Slow wage growth is generally also bad news as it means you have less in your pocket.
Less purchasing power means less money pumped into the economy which can see Gross Domestic Product (GDP) slow.
However, the BoE also doesn’t like to see wages rise too fast as it can fuel inflation and erode the value of households’ cash.
