The UK unemployment rate in the three months to October has increased to 5.1% and vacancies are declining, according to official figures.
For the three months to September the jobless rate was 5%.
The estimated number of employees on company payrolls fell by 0.5% in the 12 months to October, pointing to a “subdued labour market, said the Office for National Statistics (ONS).
Despite unemployment ticking up, pay growth came in far higher than expected.
Luke Bartholomew, deputy chief economist, at Aberdeen Group, said: “Despite wage growth coming in a bit stronger than expected, it is hard to see this data derailing a Bank of England cut on Thursday.
“Jobs growth remains weak, and unemployment rose again. Certainly the Bank will want to see this loosening in labour market conditions continuing to feed into softer pay growth eventually.
“But with GDP growth recently coming in soft, and inflation tomorrow data likely to confirm that inflation is well past its peak, the pieces are in place for several further rate cuts.”
Isaac Stell, Investment Manager at Wealth Club, said the “confidence sapping budgetary pre-amble” took its toll on the UK jobs market.
“With all the noise, speculation and damaging sentiment, it is no surprise that UK businesses put off hiring in October,” he said. “These figures should come as no surprise to the Chancellor and the Government, businesses need an environment of confidence in order to thrive, it is clear to anyone that this has been lacking in the recent past.
“Despite unemployment ticking up, pay growth came in far higher than expected, good news for those in employment with the Christmas shopping season firmly underway.
“These latest figures coupled with very weak GDP growth last week will give the Bank of England sufficient reason to cut interest rates at its meeting on Thursday.
“This is despite inflation sitting stubbornly at 3.6% as of October. Further rate cuts from there onwards however will become progressively more difficult to justify as the competing forces vie for importance.”
Recruitment and Employment Confederation chief executive Neil Carberry said: “Today’s jobs numbers will surprise no-one in business. April’s disastrous NI raid, combined with low growth, technological change and a rising tide of regulation have made businesses more hesitant about adding to their employment costs this Autumn.
“That said, the picture is not totally gloomy, as vacancies are stabilising, economic inactivity dropping and pay normalising. There is some evidence here that a turgid overall picture will improve if we can get growth going. Reducing capital costs to firms will help – a further cut in interest rates this week would be timely.”
He added: “Firms repeatedly cite the Employment Rights Bill as a brake on their hiring decisions. Recently we have seen the first positive moves to change the Bill after a year of megaphone diplomacy.
“But the practical and sensible step of retaining a qualifying period for unfair dismissal must be followed by similar steps on other areas of the Bill, such as the right to guaranteed hours, as Regulations are written.
“No-one should forget why encouraging employment creation matters. We have a crisis of youth worklessness to address, and steps which make it harder for employers to take a chance on someone, whether a young person or someone returning from sickness, must be addressed.”
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