The UK unemployment rate increased to 5.1% in the three months to October, taking it to the highest level since January 2021, just below the peak rate seen during the COVID-19 pandemic.
According to figures from the Office for National Statistics (ONS) average wage growth was 4.6%, excluding bonuses, between August and October 2025. 
Earnings growth in private companies slowed from 4.2% to 3.9% but accelerated for the public sector employees from 6.6% to 7.6%, compared with the prior three-month period.
Jane Gratton, Deputy Director of Public Policy at the British Chambers of Commerce, said: “The latest data paints a gloomy picture for jobs, opportunities and growth. It reflects what businesses tell us – they are less confident about hiring staff due to sky-high employment costs and a tidal wave of new employment legislation coming down the track.
“While there has been some easing of cost pressures – with average earnings including bonuses slowing to 4.7% in the three months to October – labour costs remain a challenge. Nearly three quarters (72%) of businesses in our latest survey said labour costs are the biggest cost pressure they are facing.
“There is a limit to how much additional cost firms can absorb without an impact on investment and growth. The further increase in unemployment, hitting 5.1% in October, is also a clear sign of the sluggish economy.
“We need a laser like focus on stimulating growth and boosting investment, trade, innovation and skills. The Government must work in partnership with business to make 2026 a year of delivery.”
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