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More warning lights are flashing on Britain's jobs market today as Andy Burnham braces for a winter of discontent.
Official figures showed numbers on company payrolls fell by 26,000 last month, and are now down 145,000 over the past year.
asserted
numbers → see → year
Job vacancies tumbled to a fresh five-year low in the three months to August, with around 8,000 fewer advertised compared to the same period in 2025.
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8,000 → tumble → 2025
Meanwhile, private sector regular wage growth was 2.9 per cent - barely keeping ahead of inflation.
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growth → keep → inflation
However, the picture is different in the public sector, where annual pay rises accelerated to 6.6 per cent.
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rises → accelerate → cent
The state also added another 11,000 jobs in the three months to June, employing 6.21million people.
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state → add → people
Liz McKeown, director of economic statistics at the ONS, pointed to the effects of Labour's increases to employer national insurance and the minimum wage.
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McKeown → point → insurance
She said: 'Smaller businesses are continuing to report that increased labour costs are affecting hiring decisions.'
The bleak picture emerged as the Middle East crisis looks to be deepening, with fears of a new wave of inflation from surging energy prices.
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crisis → say → prices
Up to five Bank of England interest rate hikes are being priced in by markets before the end of the year.
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hikes → price → year
Andy Burnham and Chancellor John Healey are already struggling to balance the books at the Budget next month, with businesses warning more tax increases could be a disaster.
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increases → struggle → Budget
Andy Burnham and Chancellor John Healey (left) are already struggling to balance the books at the Budget next month, with businesses warning more tax increases could be a disaster
The rate of unemployment in the UK held at 4.9 per cent between May and July, the ONS said.
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ONS → struggle → May
Among younger workers, aged 18-24, unemployment has risen from 11.9 per cent to 14.4 per cent over the same period.
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unemployment → age → period
Shadow Chancellor Andrew Griffith said: 'Labour is, and always has been, the party of unemployment.
'
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Labour → say → unemployment
Businesses are still absorbing the cost of Angela Rayner's disastrous (Un)Employment Rights Act, and Labour's refusal to rule out more tax rises is causing huge uncertainty for employers.
'
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refusal → absorb → employers
Only the Conservatives have a plan to get Britain working again.
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Britain → have → plan
We'll cut the red tape that makes it harder for employers to hire and deliver the lower, simpler taxes our country needs.'
The UK's labour market has been shrinking for the past two years, recording rising unemployment while fewer employers are hiring, as 16,000 fewer job vacancies were advertised since the start of the year.
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vacancies → cut → year
The Bank of England is expected to keep borrowing costs unchanged at 3.75 per cent tomorrow.
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Bank → expect → cent
The decision will come after official inflation figures are released, with analysts pencilling in an increase from 2.9 per cent to 3.1 per cent.
But fears are mounting that could just be the start of a new surge in prices, with energy costs at eye-watering levels.
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that → come → levels
The Middle East crisis looks to be escalating again, with Bloomberg Economics estimating that the energy price cap might go up 25 per cent in January.
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cap → look → January
That scenario could push headline CPI inflation to 4 per cent next year, with markets betting on multiple interest rate rises this year as the BoE tries to rein in pressures.
Chris Beauchamp, Chief Market Analyst at investing and trading platform IG, said: 'Earnings growth is slowing, while the fall in payrolls means the economy has lost nearly 150,000 jobs in a year.
'As we look ahead to more weeks of high energy prices, it seems increasingly likely that the BoE will have to move on rates even with the weaker employment situation continuing.'
Thomas Pugh, chief economist at RSM UK, said: 'The Monetary Policy Committee (MPC) has so far relied on the weakness of the labour market as cover for keeping rates on hold, but that position looks increasingly difficult to hold if the labour market stabilises and inflation rises to around 4 per cent.
'
uncertain
inflation → push → cent
We still expect the MPC to hold rates on Thursday, but a rate hike as early as November is now looking much more likely.'
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hike → expect → November
Julia Diniz, an economist at the Resolution Foundation think-tank, said: 'The big winners from today's ONS data are pensioners, who are set for another large rise in the state pension next spring thanks to the triple lock.
'
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who → say → lock
The biggest losers are workers in the private sector who are already earning less than they were last autumn.
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they → earn → less
With wage growth slumping to its lowest rate in nearly six years, the UK's private sector pay squeeze will tighten over the coming months as inflation rises.
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inflation → slump → months
'With unemployment settling at around five per cent and the number of job vacancies continuing to fall, conditions are also tough for those looking for work, especially young people.
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conditions → settle → work
Work and Pensions Secretary Pat McFadden said the ONS figures 'show a labour market that remains resilient in the face of significant global economic pressures'.
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that → say → pressures
'But we know there is more work to do, particularly to ensure young people gain the skills, experience and confidence needed to succeed,' he added.
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he → know → skills
The Aporia
