The Zhitong Finance App notes that as the UK unemployment rate falls and employers increase recruitment, official data gave Chancellor of the Exchequer John Healy an unexpected boost ahead of next week's key budget.
According to tax data, the number of salaried employees increased by 13,000 last month, contrary to economists' expectations of a reduction of 8,000. The August data was drastically revised, from a decrease of 26,000 people to an increase of 1,000 people.
In the three months up to August, the unemployment rate fell to 4.7%, the lowest since July 2025, but the UK Office for National Statistics cautioned that this estimate is still affected by issues with the quality of data collection.
After the data was released, the pound extended its gains and rose to $1.3352.
However, these data are still likely to be further revised, and job market conditions continue to divide economists' opinions. Despite positive salary data, the UK Office for National Statistics also said that the number of job vacancies decreased by 21,000 in the three months ending September.
The British Labour government is facing a difficult budget bill on October 28. Although economic growth has far exceeded expectations this year, companies have continued to expand without increasing recruitment. Artificial intelligence, employment taxes, and fluctuations brought about by the Middle East conflict have all been blamed.
There are initial signs that the energy tension caused by the Middle East conflict may be spreading to the wage demands of British workers. According to the UK Office for National Statistics, private sector wage growth without bonuses (an indicator of inflationary pressure closely watched by Bank of England policymakers) accelerated for the first time since 2024, rising from 2.9% to 3% in the three months ending August.
However, now is not the usual time to renegotiate salaries; Bank of England officials are more concerned about early 2027.
So far, the Bank of England has been delaying interest rate hikes due to concerns about the fragility of the UK labour market. However, soaring energy costs and unexpectedly strong economic resilience are bringing officials closer to raising interest rates at the November 5 meeting.