After weeks filled with key economic indicators, markets are enjoying a relatively quiet spell.
However, fresh unemployment data out of the UK provided some food for thought.
The UK’s unemployment rate rose slightly to 4.3% in the three months leading up to September. The latest report from the Office for National Statistics (ONS) revealed that the number of people claiming jobless benefits also rose significantly, with a 26,700 increase in October—up from a revised gain of 10,100 in September.
This uptick nudges the unemployment rate above the 4% seen in the three months to June and remains a key area of focus for the Bank of England, who look to the data to in part assess the impact of their monetary policy decisions. And yet, the increase – while notable – is moderate, and the ONS have cautioned against over-interpreting these figures owing to their particular methodology. Still, the data may hint that in the lead-up to the Autumn Budget, businesses operated with cautious hiring practices while they awaited the announcement of Rachel Reeves’ new fiscal rules.
Data also released on Tuesday highlighted that average regular earnings, excluding bonuses, increased by 4.8% year-on-year in the three months to September, slowing from a 4.9% raise in August even while continuing to outpace inflation. The UK’s wages data came in a little stronger than perhaps the Bank of England would have ideally wanted. But it’s a reminder that the UK economy – for all the gloom that has crept into the discourse since the election – is still in a reasonably healthy underlying condition.
