The British Statistics Office announced on Tuesday that the unemployment rate in the United Kingdom rose more than expected last September. This increases pressure on the Bank of England to continue easing monetary policy.
The Office for National Statistics said that the UK unemployment rate rose to 4.3% in the three months to September, from 4.0% in the three months to August. This was higher than the expected figure of 4.1%.
Signs of a slowdown in the labor market come after the British economy grew last August after two consecutive months of recession, and after the Bank of England cut interest rates for the second time this year.
Regarding the decision to ease monetary policy for the second time this year last week, Bank of England Governor Andrew Bailey said that prices are likely to “continue to decline gradually from here,” but he warned that they cannot be reduced “too quickly or too often.”
UK policymakers are also likely to be closely studying wage growth figures, as median earnings excluding bonuses rose 4.8% in the three months to September, slowing slightly from 4.9% in the three months to July.
In addition, the BoE will have to take into account the impact of the expansionary budget, which the Office for Budget Responsibility expects will add 0.5 percentage points to the consumer price index in 2025.
