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LONDON, Dec 13 (Reuters) – Britain’s jobless rate rose for a second month in a row and data released on Tuesday showed further signs of a cooling labor market, with older people saying they are looking for work.
But the Bank of England – which looks set to raise interest rates for a ninth consecutive meeting on Thursday – was likely to post the strongest rise in basic pay on record, excluding the period around the Covid-19 pandemic.
Sterling rose against the US dollar and the euro after the figures were released by the Office for National Statistics.
The ONS said the unemployment rate rose to 3.7% in the three months to October, up from 3.6% in the three months to September.
But regular wages rose a better-than-expected 6.1% in the August-to-October period, the biggest gain since it began in 2001, excluding a jump during the COVID-19 period that was distorted by lockdowns and government aid measures.
Total pay, including bonuses, also rose by 6.1% year-on-year, the ONS said.
Both measures of pay have lagged behind inflation, indicating reduced spending power for households.
The ONS said the economic inactivity rate – or the share of people not in work and not looking for it – fell to 21.5% in the three months to October, down 0.2 percentage points from the previous three-month period.
The decline was largely driven by more elderly people who considered themselves retired but were now looking for work.
“This is in line with other data which suggests that more people in their 50s are considering going back to work, at a time when the cost of living is rising rapidly,” ONS statistician Sam Beckett said in a statement.
However, the inactivity rate was 1.3 percent higher than before the pandemic.
The BoE fears that a shrinking pool of workers in the labor market will increase inflationary pressures in the economy.
Vacancies were lower in the three months to November than a year earlier, the first annual decline since the start of 2021, in another sign of caution among employers who believe the economy is already in recession.
Economists polled by Reuters had expected the jobless rate to rise to 3.7% from its previous reading of 3.6%.
Reporting by William Schomberg, Editing by Kylie McLellan and Andy Bruce
Our Standards: The Thomson Reuters Trust Principles.
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