There was more stark evidence of Labour's jobs crunch today with official figures showing unemployment rising – even before Rachel Reeves' latest Budget tax raid.
Fears over the labour market have been fueled after the jobless rate nudged up to 5.1 per cent in the three months to October, from 5 per cent in the three months to September. Outside of Covid, that is the highest level in nine years.
Employment was also down, while more up-to-date figures for workers on payrolls showed a 38,000 plunge in November alone to 30.3million.
However, the public sector has notably continued to grow – with numbers hitting 6.18million in September, 62,000 higher than a year ago.
That included a record 4.05million in central government, while the NHS had 2.07million staff – 28,000 more than September 2024.
Annual average regular earnings growth was 7.6 per cent in the public sector, nearly double the 3.9 per cent in the private sector.
The ONS said that was partly due to some public sector pay rises being paid earlier this year than in 2024.
Overall, average regular earnings growth eased to 4.6 per cent in the three months to October – meaning people were 0.9 per cent better off after accounting for CPI inflation.
Economists said the weak numbers would reinforce the belief that the Bank of England will cut interest rates on Thursday in a bid to revive activity.
There was more stark evidence of Labour's jobs crunch today with official figures showing unemployment rising – even before Rachel Reeves' latest Budgettax raid
Unemployment has risen in the latest figures for the three months to October
Employment was also down in the ONS figures released today
The ONS said younger workers in particular were struggling in the difficult hiring climate.
The Chancellor's monster national insurance raid on businesses, together with sharp increases in the minimum wage, have been blamed for hitting retail and hospitality businesses where younger people often find jobs.
Liz McKeown, ONS director of economic statistics, said: 'The overall picture continues to be of a weakening labour market.
'The number of employees on payroll has fallen again, reflecting subdued hiring activity, while firms told us there were fewer jobs in the latest period.
'This weakness is also reflected in an increase in the unemployment rate while vacancies remained broadly flat.
'The fall in payroll numbers and increase in unemployment has been seen particularly among some younger age groups.'
Shadow work and pensions secretary Helen Whately said: 'Losing your job is hard at the best of times, but in the run up to Christmas it's particularly cruel.
'But thanks to Labour's growth-killing policies, that's the sad reality for many people this Christmas.'
She pointed to the hike on employer national insurance contributions and the measures included in the Employment Rights Bill.
Shadow business secretary Andrew Griffith said Labour were 'pursuing a suite of anti-business policies that is sending employers to the wall'.
But Work and Pensions Secretary Pat McFadden said: 'There are over 350,000 more people in work this year and the rate of inactivity is at its joint lowest in over five years, but today's figures underline the scale of the challenge we've inherited.
'That is why we are investing £1.5billion to deliver 50,000 apprenticeships and 350,000 new workplace opportunities for young people – giving them real experience and a foot in the door.
'To go further and tackle the deep-rooted issues of our labour market, Alan Milburn is also leading an investigation into the whole issue of young people inactivity and work.'
