"Today’s data bolsters the case for an interest rate cut this week with the MPC indicating that it would depend on wage pressures continuing to moderate. The latest evidence from the labour market should be sufficient to justify a rate cut later this week.
“The unemployment rate edged up to 5.1% in the three months to October with younger workers bearing the brunt of the slowdown in labour market activity as youth unemployment increased to 16%. The prospects for a rebound in hiring activity for younger workers remain weak, particularly with the National Living Wage set to rise by 8.5% from April 2026 for 18–21-year-olds.
“Wage growth slowed to 4.4% in October, while public sector pay growth remains elevated at 8.5%, following an easing in the downward momentum on wage pressures. Meanwhile, private sector pay growth fell to 3.5%, reflecting a marked slowdown in hiring activity amongst businesses which is expected to remain muted in the near term given the weak state of the economy.”
