London Daily

Focus on the big picture.
Saturday, May 31, 2025

Wages rise by more than expected but unemployment also grows, Office for National Statistics figures show

Wages rise by more than expected but unemployment also grows, Office for National Statistics figures show

The latest wage figures will likely concern policymakers at the Bank of England who fear increases will fuel inflation further down the line.

Wage growth picked up by more than expected over the three months to September, according to official figures also showing a rise in the jobless rate.

The Office for National Statistics (ONS) said average weekly earnings, excluding bonus payments, rose at an annual rate of 5.7% during the three months to September as more workers secured better deals to help navigate the cost of living crisis and firms moved to retain and attract staff.

That was up from the 5.4% figure last month.

Economists polled by Reuters had expected an increase of 5.5%.

Nevertheless, at 5.7% it remains well below the official rate of inflation at 10.1%.

Real wage growth was 3.7% weaker in September when the effects of inflation were included, the ONS said.

The unemployment rate rose to 3.6% from 3.5% as the number of people in employment fell by 52,000.



Darren Morgan, ONS director of labour and economic statistics, said of the shift: "The proportion of people neither working nor looking for work has risen again.

"Since the onset of the pandemic, this shift has largely been caused by older workers leaving the labour market altogether, but in the most recent quarter the main contribution has actually come from younger groups.

"August and September saw well over half a million working days lost to strikes, the highest two-month total in more than a decade, with the vast majority coming from the transport and communications sectors.

"With real earnings continuing to fall, it's not surprising that employers we survey are telling us most disputes are about pay."

The figures were released as the economy battles problems from the highest inflation for 40 years and the fallout from Trussonomics - namely the now largely reversed mini-budget of September.

Official figures last week showed the economy contracted during the third quarter of the year as the cost of living crisis hit demand, leaving the country on course for a prolonged but shallow recession, according to the Bank of England, which believes the jobless rate could hit 6.5%.


The Bank fears a shrinking labour market will add to inflation pressures, forcing it to raise the Bank rate even as the economy heads into the expected recession.

The rate is the single most important interest rate in the UK and determines the rate the Bank of England pays to commercial banks that hold money with them. It influences the rates those banks charge people to borrow money or pay on their savings.

The Truss government's growth plan exacerbated problems as financial markets called into question the UK's economic credibility, making imports more expensive through a collapse in the value of the pound.

Other implications included a rise in fixed-term mortgage costs, adding to households' growing bill mountain.

Jeremy Hunt, the chancellor, will deliver his autumn statement to MPs on Thursday with little firepower to help alleviate the overall pain.

He told Sky News on Sunday that everyone faced higher taxes as the government, now led by Rishi Sunak, aims to take a more sustainable approach to the public finances.

It is believed the package will be designed to save about £50bn from annual borrowing in the medium term.

Mr Hunt said in reaction to the employment data: "Tackling inflation is my absolute priority and that guides the difficult decisions on tax and spending we will make on Thursday.

"Restoring stability and getting debt falling is our only option to reduce inflation and limit interest rate rises."

Shadow chancellor Rachel Reeves said: "Today's figures press home the knock-on impact of 12 years of Tory economic mistakes and low growth.

"Real wages have fallen again, thousands of over 50s have left the labour market and a record number of people are out of work because they're stuck on NHS waiting lists or they're not getting proper employment support.

"What Britain needs in the autumn statement on Thursday are fairer choices for working people, and a proper plan for growth."

Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
Labour MPs Urge Chancellor to Tax Wealthy Over Cutting Welfare
Publication of UK Child Poverty Strategy Delayed Until Autumn
France Detains UK Fishing Vessel Amid Post-Brexit Tensions
Calls Grow to Resume Syrian Asylum Claims in UK
Nigel Farage Pledges to Reinstate Winter Fuel Payments
Boris and Carrie Johnson Welcome Daughter Poppy
×