Nonetheless, over the past 11 months, retail, leisure and hospitality businesses have lost more than 100,000 payrolled employees. These sectors felt the impact of the NICs raid hardest as they tend to employ a larger share of part-time, low-paid and young staff.<\/p>\n
Unemployment is back up to its pandemic levels at 4.8 per cent, the ONS said. Joblessness among young people drove unemployment higher, a reflection of the damage the NICs rise has done to this group who are at the start of their careers. <\/p>\n
Older people, in contrast, are thriving. The ONS estimated that there were 1.7 million people aged over 65 in work in the past three months, most of whom also receive the state pension, a record high and up by nearly 7 per cent in the past quarter alone. That may, however, be a function of inflation eating into the real value of retirement savings, forcing workers to stay in their jobs for longer than they had hoped.<\/p>\n
That is not to say the labour market would not have corrected anyway without Reeves\u2019s tax increases. <\/p>\n
The post-pandemic labour market in the UK \u2014 and around the world \u2014 was surprisingly healthy, prompting many to predict it would eventually prove unsustainable. At their peak, vacancies hit 1.3 million, a figure now down to 717,000, and pay growth headed towards 10 per cent. Given the UK economy\u2019s well-known growth and productivity problems, this could not last without generating some inflation.<\/p>\n
The tax increases announced last October, which focused on employment rather than wealth or earnings, probably acted as a catalyst for this labour market unwinding. <\/p>\n
In its election manifesto, Labour has ruled out raising the main rates of VAT, income tax and employee NICs. But to keep that promise, Reeves was forced into more economically harmful tax rises to support the public finances. She may have to do the same at the budget on November 26 to maintain the manifesto pledges.<\/p>\n
Last year Reeves gambled on the jobs market being able to withstand the increase in NICs. Some economists have said she should consider reversing the 4 percentage point cut to individual NICs<\/a> pushed through by the Conservatives to avoid piling further misery on employers at the budget next month. That would yield tens of billions of pounds towards plugging a fiscal hole estimated to be as high as \u00a340 billion.<\/p>\n Setting aside the chancellor\u2019s options, there were signs of encouragement for the Bank of England in the latest labour market statistics.<\/p>\n Private sector wage growth<\/a> \u2014 a key indicator for the central bank \u2014 slid to 4.4 per cent, the lowest rate since the three months to December 2021 and above the inflation rate of 3.8 per cent. Regular wage growth cooled to 4.7 per cent over the previous quarter, the weakest increase since the quarter to May 2022, the ONS said.<\/p>\n However, real weekly wages \u2014 what is left over after inflation \u2014 have only increased to \u00a3682 from \u00a3680.50 since September last year, \u201cbarely enough to cover the cost of a Greggs sausage roll\u201d, Charlie McCurdy, an economist at the Resolution Foundation think tank, said.<\/p>\n The number of unemployed people per vacancy, a kind of measure of competition for jobs, inched up to 2.4 and has been steadily increasing over the past three years, which should keep a lid on pay pressures and encourage the Bank\u2019s rate-setters.<\/p>\n Fundamentally, though, the expectation in the City remains that the monetary policy committee<\/a> will leave borrowing costs unchanged at 4 per cent for the remainder of the year.<\/p>\n \u201cOne weak labour market release is unlikely to move the Bank of England away from its \u2018gradual and careful\u2019 approach to easing\u201d, BNP Paribas, the French investment bank, said.<\/p>\n Cuts will resume next year though, with analysts at Capital Economics, a research outfit, predicting that rates could go as low as 3 per cent.<\/p>\n Robert Walters see signs of recovery in recruitment Many workers are reluctant to move jobs for fear of being last in and first out<\/p>\n DAN KITWOOD\/GETTY IMAGES<\/p>\n For the first time in almost three years there are \u201csigns of sustained improvement\u201d in the hiring market, Robert Walters, the London-listed recruiter, has said (Tom Howard writes).<\/p>\n Echoing comments from its larger peer, Hays, last week, Robert Walters reported that its trading \u201cimproved slightly\u201d over summer, particularly in the UK and Asia.<\/p>\n![\"Commuters](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2025\/10\/\/b8beb969-0a7e-4d4b-8d29-1c8dcfc46750.jpg\")
<\/p>\n