UK unemployment rate unexpectedly dips - ONS

(Sharecast News) - The UK unemployment rate unexpectedly dipped in August, official data showed on Tuesday, although the number of vacancies also continued to fall. According to the Office for National Statistics, the unemployment rate in June to August was 4.7%, better than the 4.9% markets were expecting and down 0.1 percentage points on both the year and quarter.

However, vacancies also fell, by an estimated 2.9% quarter-on-quarter in the three months to September, as small firms opted to hold back on hiring amid higher costs. It was the largest fall since the start of the year.

David Freeman, deputy director of labour market statistics at the ONS, said: "The number of vacancies has seen its largest fall since the start of the year, concentrated mainly within smaller businesses, which cite increased labour costs as a key factor."

Wage growth, meanwhile, remained relatively stable. Annual growth in employees' average regular earnings excluding bonuses was 3.7%, up from 3.6% and marginally ahead of consensus for no change. Including bonuses, and growth slowed to 3.7% from 3.9%, the lowest rate in nearly six years.

Driving the growth was the public sector, where annual average regular earnings growth was 6.3% compared to 3% in the private sector.

The data will provide the Treasury with a final snapshot of the job market ahead of John Healey's Budget next week. The chancellor needs to balance mounting inflation, in the wake of war in the Middle East, and cost of living pressures with soaring government spending and debt and sluggish economic growth.

Consumer sentiment also remains depressed, as households brace for interest rate hikes.