UK Unemployment Rises to 4.3%, as Wage Growth Slows Amid Economic Uncertainty
The UK’s unemployment rate rose to 4.3% in the three months leading up to September, marking an increase from 4% in the previous quarter, according to recent data from the Office for National Statistics (ONS). However, the ONS has cautioned against relying heavily on these figures due to data collection challenges that may impact accuracy.
Despite the slowing of wage growth, pay increases remain above inflation, which measures the rate of price rises. Data reveals that excluding bonuses, wages grew by an annual rate of 4.8% between July and September, the slowest rate in over two years. This deceleration could reflect the easing of the labour market, where job demand has waned. Vacancy numbers have been consistently declining for more than two years, indicating a broad softening in hiring trends.
Liz McKeown, ONS director of economic statistics, highlighted on the BBC’s Today programme that while the latest data hints at a “continued easing of the labour market,” the response rate for the ONS’s Labour Force Survey—a primary source of UK employment data—has been lower than usual, raising concerns about the data’s reliability. The accuracy of these figures is crucial as the Bank of England closely monitors employment data when making interest rate decisions. Last week, the Bank reduced rates for the second time this year, following a drop in inflation to 1.7%, below its 2% target.
McKeown acknowledged that issues with the current data are affecting the Bank’s decision-making process, and efforts are underway to refine the methodology.
Adding to businesses’ challenges, a rise in National Insurance contributions (NICs) and the upcoming minimum wage increase have sparked concerns from major employers. Supermarket chains, including Asda and Sainsbury’s, along with High Street retailer Marks and Spencer, have expressed concerns about rising operational costs due to these new measures, announced in Chancellor Rachel Reeves’ recent Budget.
For businesses like Wendy Jones-Blackett’s greeting card company, headquartered near Leeds, these changes bring a potential strain on finances. Jones-Blackett mentioned that rising costs for outsourced services like printing and storage might impact her company’s ability to provide competitive pay increases. “If you want to retain good staff, you need to increase their pay,” she explained. “We want to do that but will have to temper it with rising costs.”
On the hiring front, recent data from the Recruitment and Employment Confederation and consultancy KPMG show that job vacancies have dropped for a consecutive 12 months, underscoring a reduced demand for new workers. Alexandra Hall-Chen, a principal policy adviser at the Institute of Directors, warned that the tax increases and new employment regulations introduced in the Employment Rights Bill are putting significant strain on hiring plans. “The cumulative effect of these changes will ultimately stifle job creation,” she said, urging the government to address businesses’ concerns.
Rob Wood, chief UK economist at Pantheon Macroeconomics, noted that while unemployment may gradually increase, the Bank of England is expected to focus on broader trends rather than specific data fluctuations when assessing future interest rate changes.
Meanwhile, Work and Pensions Secretary Liz Kendall has emphasized the importance of improving living standards, noting that three million of the lowest-paid workers are set to benefit from a minimum wage increase starting in April.
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Key Suspect in Channel Smuggling Operation Arrested in Amsterdam Following International Effort
A Turkish man believed to be a primary supplier of small boats and engines to people smugglers has been arrested at Amsterdam’s Schiphol Airport in a coordinated operation involving the UK’s National Crime Agency (NCA) and police from the Netherlands and Belgium. The 44-year-old suspect, who has not been publicly named, is accused of supplying essential equipment to smuggling operations in northern France, aiding illegal crossings of the English Channel.
The suspect’s arrest came on Wednesday as authorities tracked him traveling from Turkey to the Netherlands. He now faces extradition to Belgium, where he will be charged with human smuggling, according to the NCA. Authorities allege he operated a supply chain extending from Turkey, where he sourced engines and boats, through Germany for storage, and ultimately to northern France, where the equipment was allegedly handed over to smuggling networks.
UK Prime Minister Sir Keir Starmer praised the arrest as a “significant piece of the jigsaw” in efforts to curb dangerous Channel crossings. However, he acknowledged that the fight against illegal immigration and people smuggling would require sustained, multifaceted measures. “I’m not pretending this is the silver bullet,” Starmer stated, emphasizing that additional actions would be necessary to meaningfully impact the volume of Channel crossings.
The arrest represents what the NCA has described as a milestone in its ongoing battle against organized immigration crime. NCA Director General for Operations Rob Jones called the suspect a “major supplier” of equipment used in risky and illegal Channel crossings and highlighted the operation as one of the agency’s most significant efforts in tackling immigration-related organized crime. The NCA is currently leading around 70 investigations into high-ranking networks and individuals involved in human trafficking or illegal immigration.
Home Secretary Yvette Cooper also highlighted the significance of international collaboration, attributing the success of the arrest to joint efforts between the NCA and European partners. “The excellent work of the UK’s National Crime Agency has been critical to this. We will stop at nothing to root out criminal networks wherever we find them,” she said.
The UK government has recently escalated its approach to people smuggling, with Sir Keir Starmer announcing an additional £75 million to strengthen border policing and pledging to treat human traffickers “like terrorists.” This arrest, Starmer said, demonstrated the effectiveness of partnering with international agencies to dismantle smuggling networks.
The development follows a high-profile conviction in the UK last week. Amanj Hasan Zada, an Iranian national residing in Lancashire, was sentenced to 17 years in prison for operating what the NCA described as a “sophisticated enterprise” facilitating Channel crossings. Zada, who had gained notoriety for promoting his services on Facebook, was deemed one of the “best smugglers” by prosecutors, underscoring the profitable nature of this dangerous trade.
The issue of Channel crossings remains urgent, with more than 32,000 people making the journey so far in 2024 — a number that has already exceeded the total for 2023. Tragically, over 50 people have died attempting the perilous crossing this year, highlighting the deadly risks associated with the people smuggling trade. The UK government’s latest steps, coupled with high-profile arrests, reflect a renewed determination to address this ongoing crisis.
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