What's happened
The UK's unemployment rate increased to 4.3% in September, up from 4% in August, as wage growth slowed. This shift follows recent budget measures by Chancellor Rachel Reeves, including a rise in the national minimum wage and employer national insurance contributions, raising concerns about the labour market's stability.
Why it matters
What the papers say
According to Richard Partington in The Guardian, the rise in unemployment to 4.3% is accompanied by a slowdown in wage growth, which has raised concerns among businesses about the impact of increased national insurance contributions. He notes that 'the labour market continues to split with signs of employers’ weakening intentions to hire.' Meanwhile, Larry Elliott highlights that while the unemployment rate is still low by historical standards, 'there are some cracks appearing in the labour market.' This sentiment is echoed by Sanjay Raja from Deutsche Bank, who points out that the figures indicate a steady loosening in the labour market, suggesting potential challenges ahead for Chancellor Reeves. For a deeper dive into the implications of these changes, read Partington's full analysis in The Guardian.
How we got here
The UK has experienced a low unemployment rate and numerous job vacancies in recent years. However, recent economic slowdowns and budgetary changes by Chancellor Rachel Reeves have prompted scrutiny of the labour market's health, leading to the latest unemployment figures.
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