Wage Growth Drops, Unemployment Climbs: What Happens Next?
The Office for National Statistics (ONS) has just dropped a sobering headline: wage growth has slipped to its lowest in a long time, while the UK’s unemployment rate has nudged up. The figures are clear.
Key Numbers
- Unemployment rose to 4.3% in September, up from 4.0% in August.
- Wage growth (including bonuses) was 4.3%, beating expectations of 3.9%.
- Wage growth (excluding bonuses) reached 4.8%, just a shade above the forecast of 4.7%.
Why It Matters
The uptick in joblessness should ring alarm bells for the government, especially after Labour’s recent “Autumn Budget.” Business owners are now facing a sharp hike in national insurance contributions, and if those extra costs stunt hiring, the whole growth agenda could come under a microscope.
Expert Take: Isaac Stell
“A lift in the unemployment rate sends the doomsday clock ticking in Westminster,” says Isaac Stell, Investment Manager at Wealth Club. He adds, “With the Budget’s new tax burden, hiring could stall, and jobs might slip away—forcing the government’s expansion plans into the spotlight.” The kicker? Wage growth is hotter than expected. That means the Bank of England has a dilemma: lowering rates could spark inflation again, whereas keeping them high could squeeze beleaguered businesses further.
