Financial News: UK Unemployment Rate Unexpectedly Drops

UK Unemployment Rate Unexpectedly Drops

(RTTNews) - The UK unemployment rate unexpectedly declined in the three months to August amid an increase in payroll employment and a moderate rise in pay growth, strengthening prospects for a Bank of England interest rate hike in November.

The ILO unemployment rate stood at 4.7 percent in the June to August period compared to 4.9 percent in the preceding period, the Office for National Statistics reported Tuesday.

Economists had forecast the rate to remain unchanged at 4.9 percent.

Data showed that payroll employees for September increased by 13,000 from the last month to 30.3 million.

In the three months to August, average earnings including bonus grew 3.7 percent from a year ago, weaker than forecast of 3.8 percent and also the 3.9 percent increase posted in the previous period. A similar slower increase was last reported during August to October 2020.

Average earnings excluding bonus also increased 3.7 percent but slightly bigger than forecast of 3.6 percent.

The ONS said vacancies decreased 21,000 to 691,000 during July to September compared with April to June. This was the largest quarterly fall since January to March 2026 as firms reduced recruiting due to higher labor costs.

"With the number of vacancies falling further, urgent action is needed in the Budget to change the dynamics around hiring," British Chambers of Commerce Head of People and Work Patrick Milnes said.?? ?????? ING economist James Smith said the labor market might be leveling out. He noted that wage growth is cool and there is scant evidence of second-round effects from the energy shock so far.

".when the Bank of England hikes rates in November, as looks increasingly likely, it won't be because of anything in the economic data," the economist added.

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