The UK unemployment rose to 5% in the three months to September, according to figures from the Office for National Statistics.
Average wage growth was 4.6% in the third quarter, down from 4.7% over the three months to August. 
Jane Gratton, Deputy Director of Public Policy at the British Chambers of Commerce, said: “There is little comfort in this data for businesses or the government. Employers are being squeezed by sky-high employment costs, and we are beginning to see the consequences.
“The strong rise in unemployment is a worrying sign, as vacancies remain virtually static on the quarter. But while the rate of wage growth with bonuses has slowed again, it is still well above inflation.
“This feeds into higher prices, and we expect the Bank of England will be paying close attention to the wage growth trend ahead of next month’s decision on interest rates.
“Nearly three quarters (72%) of businesses in our latest survey said labour costs are the biggest cost pressure. They say the increase in employer NICs is the main driver of this.
“With job vacancies static, high levels of economic inactivity and £5bn of extra employment legislation around the corner, the Budget must give firms a reason to be optimistic. Businesses need confidence to boost investment and drive the economic growth we all want to see.
“The number one priority for firms is that no fresh tax burdens are placed on them in the Budget. The Chancellor must also use her statement to invest in workforce health and skills.”
Read the full ONS data here.
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