UK unemployment rate rises to 5%

Britain’s unemployment rate rose more than expected to five per cent in the third quarter of 2025, the highest level since early 2021.

The Office for National Statistics (ONS) announced this on Tuesday, November 11, 2025, ahead of the UK government’s annual budget due November 26 which is set to feature tax rises amid weak economic growth.

The ONS said the rate increased from 4.7 per cent in the second quarter.

Analysts’ consensus forecast for the third quarter, running from July to September, had been for an increase to 4.9 per cent.

“The number of people on payroll is falling, with revised tax data now showing falls in most of the last 12 months,” ONS director of economic statistics Liz McKeown said in comments accompanying the latest figures.

The data deals a further blow to Prime Minister Keir Starmer’s ruling Labour party, which is trailing badly in popularity polls 16 months after winning a general election.

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An analyst at investment manager Wealth Club, Isaac Stell, said: “There will be no pre-budget comforts that can be taken from today’s employment data.

“Not only has the unemployment rate risen, but wage growth continues to shrink.

“With speculation around the budget reaching fever pitch, businesses have postponed hiring and are less likely to commit to any form of investment until they know where the economic land lies.”

Analysts said, however, that the weak data increased the chances of the Bank of England cutting its main interest rate at its next monetary policy meeting in December, which would ease some pressure.

Finance Minister Rachel Reeves has indicated that taxes will rise in the budget to help drive down government debt and to fund public services.

The Star