Investing.com – The UK unemployment rate increased by more than expected in September, data showed Tuesday, piling the pressure on the Bank of England to continue easing monetary policy.
According to the Office for National Statistics, the UK jobless rate increased to 4.3% in the three months to September, from 4.0% in the three months to August. This was above the expected 4.1% figure.
Signs of a cooling labor market come after Britain’s economy grew in August following two consecutive months of stagnation, and after the Bank of England cut interest rates, for the second time this year.
In making the decision to ease monetary policy for the second time this year last week, Bank of England Governor Andrew Bailey said rates were likely to “continue to fall gradually from here”, but warned they could not be cut “too quickly or by too much”.
The policymakers are also likely to study the wage growth figures closely, as average earnings excluding bonuses rose 4.8% in the three months to September, cooling marginally from 4.9% in the three months to July.
That said, annual growth in total earnings, including bonuses, was 4.3%, above the revised 3.9% in three months to August – considerably above the 3.9% expected.
Additionally, the central bank will have to factor in the impact of an expansionary Budget, which the Office for Budget Responsibility forecast will add 0.5 percentage points to the consumer price index in 2025.
