UK unemployment jumps more than forecast

FILE / STOCK

London, United Kingdom — UK unemployment has jumped more than expected, official data showed Tuesday, as firms warn of slowing jobs growth after the new Labour government hiked business taxes in its recent budget.

The unemployment rate climbed to 4.3 percent in the third quarter from 4.0 percent in the three months to the end of August, the Office for National Statistics said in a statement.

Analysts’ consensus had been for an increase to 4.1 percent.

READ: Keir Starmer warns UK budget will reflect ‘harsh’ economic reality

The ONS added that average regular wages growth had fallen to 4.8 percent, the lowest level in more than two years as inflation overall returns to normal levels.

The data comes after the government hiked national insurance, a tax on companies, in its main budget delivered at the end of October.

A third-quarter unemployment rate that “exceeded expectations by some margin… serves as a warning sign to the government following on from the budget where businesses saw a large increase in the level of national insurance contributions”, Isaac Stell, investment manager at Wealth Club, said Tuesday.

“If these additional costs restrict hiring and cause jobs to be lost, its so-called growth agenda will be further scrutinized.”

Alongside hiking taxes, Prime Minister Keir Starmer’s new government announced plans for higher borrowing that it said would be invested in infrastructure projects to help drive UK economic growth.