11 November 2025
If you are covering the latest UK labour market statistics, please see the following comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“An early Christmas present could come in the form of an interest rate cut from the Bank of England following a rise in unemployment and a softening in wage growth. The monetary policy committee had a tight 5-4 split on whether to hold or cut rates at last week’s meeting, with Andrew Bailey’s deciding vote erring on the side of caution.
“Today’s figures from the Office for National Statistics show wage growth pressures, albeit still relatively high, are slowly easing. Annual growth in regular earnings excluding bonuses saw a decline to 4.6% compared to 4.7% last month, and total earnings including bonuses fell to 4.8% compared to 5%. Any further signs of easing in the next labour market print could sway a few more on the committee to cut on the 18th December.
“Meanwhile, the UK unemployment rate has jumped up, rising to 5% in July to September 2025 from 4.8% in the prior quarter. Estimates for payrolled employees dropped by 117,000 between September 2024 and September 2025 and decreased by 32,000 on a monthly basis. Initial estimates for October also show the number of payrolled employees decreased by 32,000 on the month, although the ONS has made several revisions to its early estimates in recent months, so this figure will need to be taken with a pinch of salt.
“With the Chancellor’s budget now just two weeks away, many businesses will have shelved any major hiring plans. Having already faced a significant rise in national insurance costs earlier in the year, they will likely be nervous to make any real commitments until they know whether further costs are heading their way.
“The BoE will have time to assess the market’s reaction to the budget, and will receive another labour market print prior to its next interest rate decision. While today’s figures make a rate cut appear slightly more nailed on, much could still change in the coming weeks.”
