Ryan FowlerThe UK unemployment rate rose to 4.8% in the three months to August, up from the previous quarter, according to data released by the Office for National Statistics (ONS).
The employment rate stood at 75.1% during the period, a slight fall from the previous quarter but still above the level recorded a year earlier.
Meanwhile, economic inactivity, which measures those neither working nor seeking work, edged down by 0.1% to 21.0%, remaining lower than last year’s estimates.
Job vacancies also declined, with the number of available positions falling by 9,000 from the previous quarter to 717,000 between July and September 2025.
Despite the rise in unemployment, wage growth remained resilient. Excluding bonuses, average earnings increased by 4.7% in the three months to August compared with the same period a year earlier.
The figures indicate that while the labour market is loosening slightly, pay pressures persist across key sectors.
Catherine Foot, director of Standard Life’s Centre for the Future of Retirement, said: “The UK’s economic inactivity remains stubbornly high, including among over-50s, while the labour market shows signs of stagnation. Payroll employment has fallen around 0.5% over the past year, and employers remain cautious about hiring, even though large-scale job losses haven’t yet materialised.
“The Bank of England held interest rates at 4% at its last announcement, reflecting inflation concerns. But with hiring slowing, balancing inflation with a tight jobs market will be key to its next decision in November.
“A weak jobs market makes it harder for people to enter or re-enter work, whether they are workers in their 50s, 60s and beyond returning after a career break or ‘unretiring’, or young people seeking their first job.
“In this difficult environment, we must reduce other barriers to returning to work. This should include promoting age-inclusive hiring processes and wider access to flexible working, particularly for over-50s managing health or caring responsibilities so that workers can remain in good work for as long as they want or need to and ensure they can save enough for a good quality of living in retirement.
“We welcome efforts to reduce economic inactivity and support people to stay in the workforce, such as the forthcoming Keep Britain Working Review.”
