ONS REPORTS FALL IN UK UNEMPLOYMENT

The Office for National Statistics said the UK unemployment rate fell to 4.7 per cent in the three months to August. Accounts differ on the previous rate, placing it at either 4.8 or 4.9 per cent. The ONS figures also put growth in average weekly earnings excluding bonuses at 3.7 per cent, up from 3.6 per cent. Traders increased bets that the Bank of England would raise interest rates from 3.75 to 4 per cent in November. The Bank has pushed back on forecasts of multiple rate rises.

According to the ONS, employment rose by 102,000 over the three-month period, while September payrolls increased by a provisional 13,000. The agency revised its August payroll estimate from a fall of 26,000 to a rise of 1,000. Vacancies fell by 21,000 to 691,000 in the three months to September, the ONS said. It attributed much of the decline to smaller firms, which indicated that higher labour costs may be limiting recruitment. Private sector pay growth rose from 2.9 to 3 per cent, while growth in total pay including bonuses slowed from 3.9 to 3.7 per cent.

Market forecasts cited after the release included four rate rises over the next 12 months and a rate of 5 per cent by the end of 2027. The pound rose to around $1.34 against the US dollar and climbed above €1.19. UK government bond yields also rose after the figures appeared. Bank of England officials are due to meet in November to decide whether to change interest rates.