Job figures show signs of labour market weakening

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Unemployment rose marginally in the three months to August, suggesting businesses are feeling the impact of rising prices and high interest rates.

Official figures said the unemployment rate edged up to 4.2% between June and August from 4% between March and May.

It suggests the jobs market has weakened, with UK economic growth proving sluggish.

The current economic picture has fuelled expectations that interest rates will be left unchanged.

The Bank of England, which sets UK rates, will decide in November whether to increase, decrease, or keep rates at 5.25%.

It decided to leave its benchmark rate unchanged at its previous meeting after 14 consecutive rises, with governor Andrew Bailey saying there were "increasing signs" that higher rates were starting to hurt the economy.

The Bank first started to increase interest rates in December 2021 to slow the rate consumer prices were rising - which is known as inflation.

But it is a balancing act as raising rates too high can lead to businesses to halt investment plans or make cutbacks and stifle economic growth.

The UK is not currently in recession but there have been concerns over weak growth, with the economy set to be a key area in the election which is widely expected next year.

Mel Stride, Secretary of State for Work and Pensions, said growing the economy was the government's "priority".

He said there were now "more than one million more people on company payrolls compared to 2019, a near record high, and today's statistics also show inactivity has fallen by over a quarter of a million since the pandemic peak".

Compared to the job numbers released last month, the figures released on Tuesday have been calculated slightly differently by the Office for National Statistics in an attempt to try to make the data on jobs as reflective of the world of work as possible.