(MENAFN) Britain's unemployment rate climbed to 5 percent during the three-month period ending in September (Q3), marking the highest level in nearly ten years excluding the pandemic era, according to figures unveiled Tuesday by the Office for National Statistics (ONS).

The jobless rate among individuals aged 16 and older increased throughout the quarter, surpassing the comparable figure from one year prior, the ONS reported. Simultaneously, the employment rate for the 16-to-64 age bracket dropped to 75 percent. Economic inactivity was measured at 21.0 percent, showing minimal change from the preceding quarter.

Payroll employment sustained its downward trajectory. The total number of payrolled workers decreased by 117,000, representing a 0.4 percent decline, between September 2024 and September 2025, with an additional 32,000 drop recorded between August and September of this year. Preliminary estimates for October indicate a further reduction of 180,000 over the year, bringing the total to 30.3 million, though the ONS cautioned these numbers remain provisional.

Average earnings growth decelerated as anticipated. Regular compensation excluding bonuses increased 4.6 percent during the July-through-September timeframe, down from the prior 4.8 percent, while total compensation including bonuses rose 4.8 percent. When adjusted for inflation, real regular pay expanded 0.5 percent.

Job vacancy numbers remained relatively stable, rising modestly by 2,000 to reach 723,000 in the August-to-October window. Approximately 39,000 working days were forfeited due to labor disputes in September, the ONS noted.

Economists indicated the statistics signal a cooling labor market and may strengthen expectations that the Bank of England could soon initiate interest rate reductions.

Business organizations attributed weak hiring patterns to employer hesitancy preceding the government's forthcoming Budget on November 26. "Employers are being squeezed by high employment costs, and we are beginning to see the consequences," said Jane Gratton, deputy director of public policy at the British Chambers of Commerce.

The data emerged as the government confronts mounting pressure to reconcile its commitment to fostering growth with the imperative to address a fiscal deficit estimated at approximately 30 billion pounds (roughly 39.54 billion U.S. dollars). (1 pound = 1.32 U.S. dollar)

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