The rate of unemployment in London has jumped to its highest level since the pandemic, official figures reveal today.
The jobless total in the capital rose to 305,000, a rate of 5.9%, in the July to September quarter, according to the Office for National Statistics (ONS).
It was up from 5.5% in the previous quarter and a low of 3.7% a year ago. The rate was last higher in the May to July quarter of 2021 when the unemployment rate hit 6% during the second pandemic lockdown.
Unemployment has been rising more quickly in London than in other regions over recent months, up by 0.7% since the April to June quarter and by 0.9% over the previous year.
It is now the highest rate of any region in the UK, The national average is 4.3%.
The number of people in London signing on for benefits has also risen with the claimant count up to 363,500 in October, the highest since October 2021.
The number of people classified as “long-term sick” in London rose to 263,000 in the year to June, the highest since detailed records began in 2004.
Nationally, wage growth fell to its lowest level in more than two years while the jobless rate jumped by more than expected..
The ONS said average regular earnings growth eased back to 4.8%, down from 4.9% in the previous three months. This marked the lowest level since the three months to June 2022.
The rate of UK unemployment rose to 4.3% in the three months to September, up from 4% in the previous three months and far higher than the 4.1% pencilled in by City economists.
This was the highest level since the three months to May, although the ONS said the estimate should be treated with caution given ongoing low response rates to its jobs survey.
Vacancies dropped yet again, down by 35,000 to 831,000 in the three months to October.
Liz McKeown, ONS director of economic statistics, said: “Growth in pay excluding bonuses eased again this month to its lowest rate in over two years.
“The number of people on payrolls fell slightly in September and while it remains up on the year, annual growth continues to slow.
“The labour force survey estimates show a different picture, however, we continue to advise caution when interpreting short-term changes in these estimates, as the improvements to data collection introduced at the beginning of the year are still feeding through.
“Job vacancies have fallen again, as they have been doing for more than two years now.”
The ONS data also showed a big fall in the inactivity rate for those aged between 16 and 64 not actively looking for work - down to 21.8% in the three months to September from 22.2% in the previous quarter.
Work and Pensions Secretary Liz Kendall said: “While it’s encouraging to see real pay growth this month, more needs to be done to improve living standards too.
“So, from April next year, over three million of the lowest-paid workers will benefit from our increase to the national living wage.”
Thomas Pugh, economist at consulting firm RSM UK, said: “The tick down in wage growth excluding bonuses to 4.8% and the rise in the unemployment rate to 4.3%, won’t be enough to convince the MPC (Monetary Policy Committee) that a consecutive rate cut is needed in December. Our base case is that the MPC will cut rates once a quarter next year, but a second Trump presidency raises the risk of fewer rate cuts.
“At face value, the jump in the unemployment rate from 4.0% to 4.3%, which was driven by a 100,000 increase in unemployment, is a cause for concern. But the employment statistics are so ropey at the minute that it would have taken a huge shift to tempt the MPC into shifting towards a rate cut next month. The volatility in the unemployment rate this year looks particularly suspicious, so we doubt the MPC will pay much attention to it.
