UK unemployment rises to 4.3% as jobs market cools, but real wages are growing again

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The number of people in employment in the UK shrank by 207,000 in the last quarter, to 32.88m, today's jobs report shows.

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Published by

12 Sep 2023

That, according to the Resolution Foundation, is the biggest employment fall outside of a recession on record, and a clear sign yet that rising interest rates are cooling the labour market.

Hannah Slaughter, senior economist at the Resolution Foundation, explains:

“Britain saw the biggest employment fall outside of a recession this summer. This is the clearest sign yet that the Bank of England’s rate rising cycle is starting to cool the jobs market.

“But while higher unemployment should lead to lower wage growth in the coming months, it certainly hasn’t had that effect yet, with earnings growing at a record pace.

“The short-term pay boost could end up benefiting pensioners more than workers as it is set to deliver a big permanent boost to the state pension next April. In this context it would be wholly unfair to hold down working-age benefits, especially as poorer households are already set to see their incomes fall next