The U.K. labour market showed further signs of cooling in October, reinforcing expectations that the Bank of England (BoE) will lower interest rates at its final policy meeting of the year later this week.<\/p>\n\n\n\n
Data released on Tuesday by the Office for National Statistics (ONS) showed that the unemployment rate rose to 5.1%<\/strong> in the three months to October, up from 5.0%<\/strong> previously and marking a new post-pandemic high. The increase confirms a gradual but persistent weakening in labour market conditions.<\/p>\n\n\n\n At the same time, wage pressures continued to ease. Annual pay growth excluding bonuses slowed to 4.6%<\/strong>, down from a revised 4.7%<\/strong> in the prior period. While wage growth remains elevated by historical standards, the deceleration suggests that underlying inflationary pressures from the labour market may be easing.<\/p>\n\n\n\n The latest figures arrive just days before the BoE\u2019s policy decision on Thursday and are likely to weigh heavily on the Monetary Policy Committee\u2019s deliberations. The central bank has repeatedly highlighted the labour market and wage growth as key determinants of inflation persistence.<\/p>\n\n\n\n Although inflation is slowing, it remains well above target. Headline consumer price inflation eased to 3.6% in October<\/strong>, down from 3.8% in September<\/strong> and marking the slowest pace in four months. Even so, inflation remains far above the BoE\u2019s 2% target<\/strong> and is the highest among G7 economies.<\/p>\n\n\n\n Last month, the BoE opted to keep rates unchanged in a closely split decision, with four of nine policymakers voting in favour of a 25-basis-point cut<\/strong>. Since then, softer labour market data and moderating wage growth have strengthened the argument for easing.<\/p>\n\n\n\n Markets now widely expect the BoE to cut its benchmark interest rate to 3.75% from 4.0%<\/strong>, potentially bringing borrowing costs to their lowest level since early February 2023. Governor Andrew Bailey is seen as pivotal to the decision, with investors anticipating a shift in his stance toward supporting a cut.<\/p>\n\n\n\n Additional support for a rate reduction comes from recent fiscal measures announced by Chancellor Rachel Reeves in last month\u2019s budget. These included relief on energy bills, fuel duty, rail fares and prescription charges\u2014steps that could help dampen household cost pressures and give the BoE more room to loosen monetary policy.<\/p>\n\n\n\n Overall, the combination of rising unemployment, cooling wage growth and easing\u2014though still elevated\u2014inflation suggests that the balance of risks for the BoE is tilting toward supporting growth, making a rate cut later this week increasingly likely.<\/p>\n","protected":false},"excerpt":{"rendered":" The U.K. labour market showed further signs of cooling in October, reinforcing expectations that the Bank of England (BoE) will lower interest rates at its final policy meeting of the year later this week. Data released on Tuesday by the Office for National Statistics (ONS) showed that the unemployment rate rose to 5.1% in the …<\/p>\n","protected":false},"author":9,"featured_media":33011,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[6827,37,36],"tags":[7202,10286,9848],"class_list":["post-121749","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-daily-economic-reports","category-forex-markets","category-market-updates","tag-bank-of-england","tag-pill","tag-pmis"],"_links":{"self":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/121749","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/comments?post=121749"}],"version-history":[{"count":1,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/121749\/revisions"}],"predecessor-version":[{"id":121750,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/121749\/revisions\/121750"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media\/33011"}],"wp:attachment":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media?parent=121749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/categories?post=121749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/tags?post=121749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Implications for Bank of England policy<\/h3>\n\n\n\n
Fiscal backdrop supports easing<\/h3>\n\n\n\n