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UK unemployment rate rises to 4.2%

The latest jobless figures suggest that rising borrowing costs may be feeding through to the labour market.

24 October 2023

The reality of higher interest rates might be finally dawning on the employment landscape as companies reduced hiring, according to new calculation methodology from the Office of National Statistics. This morning’s “adjusted experimental” UK unemployment rate came in at 4.2% in the three months to August, compared to 4.0% in the three months to May.

If this is the start of a deterioration in the employment outlook for the UK, it is more than likely that the Bank of England will feel that rates are as restrictive as they need to be to finally have the desired impact on demand. The big question obviously is, “Can we categorically state that the jobs market has really turned?” Clearly, a three-month view using a new calculation output might not give us the full picture yet.

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Charles Hepworth

Investment Director
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