Tech shares slide after SoftBank sells Nvidia stake; UK interest rate cut expected in December – business live

4.47pm GMT FTSE 100 closes at new high Britain’s stock market has closed at a new high, as investors anticipate a cut to UK interest rates next month. Having scaled the 9,900 point mark for the first time in late-afternoon trading, the FTSE 100 slipped back slightly in the closing auction to finish at a new closing high of 9899.6 points. That’s a jump of 112.5 points, or 1.15%, today. Raffi Boyadjian, lead market analyst at Trading Point, says: European stocks were in a buoyant mood. The UK’s FTSE 100 is leading the gains, hitting record territory on renewed bets that the Bank of England will cut rates at its next meeting. Those bets were boosted by the weak jobless data this morning, which showed UK unemployment has hit its highest level since early 2021. With a December rate cut now seen as a 74% chance, shares in UK housebuilders rose today. Vodafone were the top riser, as investors welcomed its decision to increased its dividend for the first time in eight years and upgraded its profit guidance Pharmaceuticals firm AstraZeneca gained 2.5%, hitting a new record high today. Updated at 4.50pm GMT 4.22pm GMT Back in London, the stock market has hit a new record high in late trading. The FTSE 100 has climbed over the intraday high set this morning, and is now trading over 9,900 points for the first time – at 9,907 points. 4.20pm GMT Nvidia’s share price is continuing to dip – it’s now down 3.1% at $192.88. 2.59pm GMT SoftBank’s decision to sell out of Nvidia is “a major event for markets”, says AJ Bell investment director Russ Mould. “People are looking for clues that the tech rally is close to the top, and SoftBank’s profit-taking in the chip giant is significant. “Investors typically sell out of positions when they believe the valuation is too rich, the growth prospects for the company are less attractive than before, or they’ve found something better to back and need cash to make that investment. “SoftBank is an active investor and has a deal to invest billions of dollars into OpenAI, which suggests that it still sees massive opportunities to make money from the AI revolution. Selling out of Nvidia while also trimming its position in T-Mobile helps to top up the war chest for the next wave of AI-related investments. “Nvidia has had a storming run on the markets and SoftBank might think it is prudent to cash in while the going is good. “Nvidia’s role in an AI world is already well known, yet OpenAI’s position is still evolving, so it might simply be that SoftBank sees the latter as a better way of profiting from the tech explosion going forward, rather than sticking with yesterday’s trailblazer. “What’s important for markets is the fact that SoftBank’s exit from Nvidia isn’t the Japanese group washing its hands completely of all things AI.” 2.58pm GMT The tech-focused Nasdaq index has dropped by 0.6% in early trading. Marketing firm Applovin (-5,6%) are the top faller, followed by semiconductor maker Micron (-3.8%) and chip designer ARM (-3.6%). 2.35pm GMT S&P opens lower as tech shares slide The US stock market has opened slightly lower. The S&P 500 index dipped by 0.25% at the open, with Nvidia (-2.3%) among the fallers following SoftBank’s sale of its stake in the chipmaker (see earlier post). Fellow tech companies Oracle (-2.5%) and Dell (-2.4%) are leading the fallers. As well as concerns over technology valuations, investors will have noted today’s warning that US companies cut jobs at the end of last month (see earlier post). Updated at 2.41pm GMT 2.33pm GMT Nvidia shares fall after SoftBank sells stake Shares in chip giant Nvidia have fallen by over 2% at the start of trading in New York, after one of its major shareholders revealed it had sold its stake. Japan’s SoftBank disclosed this morning that it had sold its entire shareholding in Nvidia in October, for $5.83bn. Analysts said SoftBank, a powerful tech investor, appears to be raising money to fund other investments in artificial intelligence groups such as OpenAI. But… the sale of the stake in Nvidia, which has been very profitable for SoftBank, could fuel concerns that AI valuations have risen too high. Nvidia’s stock has dropped by 2.3%, to $194.70, but is still up over 45% so far this year (and around 1,300% over the last five years!). SoftBank’s chief financial officer Yoshimitsu Goto told investors that the salw as part of the firm’s strategy for “asset monetization,” explaining: “We want to provide a lot of investment opportunities for investors, while we can still maintain financial strength.” “So through those options and tools we make sure that we are ready for funding in a very safe manner. 2.18pm GMT The jump in the UK unemploymen rate is a blow to the Government’s tax take. Robert Salter, a director at audit, tax and business advisory firm Blick Rothenberg, explains: “4.2% of people were unemployed when the Government came to power in 2024, and today’s figures from the Office of National Statistics (ONS) reveal it has increased to 5%. Each additional individual who is unemployed represents both a reduction in the Government’s tax take and an increase in cost of providing social support.” “There has been a lot of speculation and commentary on the size of the UK’s ‘fiscal black hole’ in recent weeks and the increase in the unemployment rate will only compound the challenges faced by the Chancellor, Rachel Reeves as the Budget looms ever closer.” 1.38pm GMT ADP: US companies shed jobs last month Just in: We also have a weak-looking jobs report from the US. Not an official report (the shutdown isn’t over yet!). But private payroll operator ADP has crunched its latest data, and found that in the four weeks to 25 October, private employers shed an average of 11,250 jobs a week. That suggests the labor market struggled to produce jobs consistently during the second half of the month, ADP say. This implies a weak jobs market – which might spur the US Federal Reserve into cutting US interest rates. It’s also surprising, as ADP reported last week that private sector employment increased by 42,000 jobs in October. Unless I'm being a moron this makes no sense - the weekly survey suggests that the economy LOST 45k jobs in Oct, the monthly survey suggests the economy GAINED 42k jobs in Oct... 🤷‍♂️ https://t.co/h6ayjh3u3s— Michael Brown (@MrMBrown) November 11, 2025 This apparent contradiction could be caused by a sharp deterioration in the jobs market towards the end of October (after the monthly data was collected). 1.17pm GMT The FTSE 100 has slipped back from this morning’s record high, as investors anticipate a weak start to trading in New York. Wall Street futures indicate the S&P 500 share index could drop by 0.25%, while the Nasdaq tech index is on track for a 0.4% drop. Concerns around elevated technology valuations appear to have resurfaced, while markets watch whether the longest government shutdown in US history is ending. 1.03pm GMT Vodafone shares at two-year high after dividend boost Vodafone has increased its dividend for the first time in eight years and upgraded its profit guidance, sending shares in the telecoms operator to a more than two-year high. The company, which completed a £16.5bn merger of its UK operations with rival Three earlier this year, was boosted by a return to revenue growth in its biggest market, Germany, which has been struggling for the last two years. Shares rose about 6% on Tuesday, making Vodafone the biggest riser in the FTSE 100 (lifting it to that new record), as the company said it would increase its dividend for the first time since 2018. Margherita Della Valle, who has been carrying out a major transformation programme since being appointed as the company’s first female chief executive two years ago, said that Vodafone is looking to move towards a “progressive dividend policy” to increase returns to shareholders annually. The group slashed its dividend by about 40% in May 2019 after the cost of buying mobile 5G spectrum caused its debt to balloon. “It’s been a long time since this happened at Vodafone and we are pleased that we are able to share this with our investors,” Della Valle said. The new dividend policy will deliver an expected increase of 2.5% in the year to the end of March. Vodafone said that it now expects to deliver the upper range of guidance for full year earnings of between €11.3bn and €11.6bn, and adjusted free cash flow of €2.4bn to €2.6bn. In Germany, where Vodafone has lost half of its TV customers between July 2024 and March this year due to a law change that gave customers living in housing association properties the right to choose their own TV provider, the company added 90,000 new customers in the first half of its current financial year. “The group had quite simply been fighting fires on too many fronts while dealing with an increasingly onerous debt burden, leading to the need for a significant transformation,” said Richard Hunter, head of markets at Interactive Investor. “What is now emerging is a smaller and less geographically diverse, but more focused operation.” Vodafone UK is currently embroiled in a £78m legal claim with more than 60 of its franchise operators. Claimants have accused the company of “unjustly enriching” itself by cutting commission rates paid to franchisees which many have said have led to them running up huge personal debts and fearing for their livelihoods or homes. Related: Talks to settle £120m legal claim against Vodafone end without success Vodafone has been offering settlements to some former franchise partners who are not involved in the high court claim.“As you know we have touched on this before,” said Della Valle, in response to a question about the status of the legal action and settlement offers. “This is a specific commercial dispute between Vodafone UK. Some of its franchisees are going through a legal process so I cannot comment further.” A spokesperson for Vodafone UK said: “Vodafone continues to defend all allegations against them in this commercial dispute.” Updated at 2.56pm GMT 12.50pm GMT Kate Nicholls, chair of UKHospitality, has firmly blamed Rachel Reeves’s budget a year ago for the downturn in the jobs market. Nicholls warns that hospitality firms are businesses are reducing hours, cancelling investment, raising prices, or even closing down, as well as cutting jobs. “Thirteen months of falling employment and 170,000 fewer people on payroll is a shocking indictment of the damage caused by last year’s Budget. “Hospitality has borne the brunt of these changes, with more than half of all job losses coming from our sector. If the Government wants to get more people back into work and revitalise high streets, it needs hospitality firing on all cylinders, but right now we’re being taxed out. “We urgently need action at the upcoming Budget and are calling on the Government to lower business rates, fix NICs and cut VAT. These measures will help reverse some of the damage, protect jobs and allow hospitality to grow and prosper again.” 12.44pm GMT Related: Rising unemployment could affect budget, interest rates, pay and more 12.28pm GMT Key event Disabled people are bearing the brunt of the weakening UK job market, charity Scope is warning today. Scope, the disability equality charity, has analysed today’s UK labour market report and spotted that the number of disabled people in employment fell by 349,000 between July-September 2024 and July-September 2025. This means the Disability Employment Gap (DEG) (comparative employment rates of disabled and non-disabled people) rose to 30.1% points in the third quarter of 2025, up from 27.5% points a year earlier. They also report that disabled people are more than twice as likely to be unemployed as non-disabled people: Employment rates for disabled people dropped to 52.3% (compared to 54.5% in the third quarter of 2024) while for non-disabled individuals improved, reaching 82.5% compared to 81.9% in the third quarter of 2024. Unemployment among disabled individuals has been rising since the first quarter of 2024. And it continued to do so reaching 9.1% for disabled people in the third quarter of this year (compared to 6.7% same quarter in 2024). Inactivity rates, after stability for few months, began to increase among disabled people from 41.6% in July-September 2024 to 42.5% in same quarter in 2025. This is not the case for non-disabled people, for which inactivity rates have continued to fall. James Taylor, executive director of strategy at Scope, says: “It’s alarming that disabled people are bearing the brunt of the weakening job market. It suggests disabled people are facing a double whammy of being hit hardest by job cuts, and not getting the opportunities they should. Huge numbers of disabled people want to work but are denied the opportunity, Taylor adds: “Scope’s employment advisers regularly work with disabled people who have been pushed out of jobs by employers’ negative attitudes or rigid working practices. “With unemployment rising and hiring sluggish, the government needs to invest in supporting disabled people to get into and stay in work.” Updated at 12.44pm GMT 11.53am GMT Bank of England policymaker Megan Greene has indicated that this morning’s weak UK unemployment data won’t prompt her to vote for interest rate cuts next month. Greene is one of the more hawkish members of the Bank’s monetary policy committee, and one of the five who voted to leave rates unchanged last week. Speaking at a UBS conference in London, Greene said she believed the labour market is past the worst and warned that firms are predicting more hefty wage increases, Bloomberg reports. Greene explaine: “If you look at some of the higher frequency data, it suggests that maybe the adjustment in the labor market is mostly behind us now. It’s possible that the worst is behind us, but it’s certainly something I’m looking at.” She did warn, though, that the rise in the unemployment rate to 5% was a blow for the economy, saying: “Unemployment does have a five handle on it now, for the first time in a really long time. And that’s not great.” 11.36am GMT US small business optimism falls Over in the US, small business owners have grown more pessimistic about their prospects. The NFIB Small Business Optimism Index declined 0.6 points in October to 98.2, with small firms reporting falling sales and a struggle to hire workers. The Uncertainty Index fell 12 points from September to 88, the lowest reading of this year. NFIB chief economist Bill Dunkelberg says: “Optimism among small businesses declined slightly in October as owners report lower sales and reduced profits.” “Additionally, many firms are still navigating a labor shortage and want to hire but are having difficulty doing so, with labor quality being the top issue for Main Street.” The report found: Thirty-two percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, unchanged for the second consecutive month. Before August, the last time unfilled job openings hit 32% was in December 2020. In October, 27% of small business owners cited labor quality as their single most important problem, up 9 points from September and the highest level since the record high of 29% in November 2021. Labor quality ranked as the top problem and was 11 points higher than taxes, which ranked second. A net negative 13% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down 6 points from September. 11.19am GMT The prospect of a cut in UK interest rates next month has driven up shares in Britain’s housebuilders. Berkeley Group (+2%) are among the top risers on the FTSE 100 index this morning, with Persimmon (+1.6%) and Barratt Redrow (+1.6%) both higher. Chris Beauchamp, chief market analyst at IG, explains: “The chances of a December rate cut have risen throughout the morning following the unemployment figures, and now stands at 86%. This expectation of looser policy has given a boost to housebuilder shares - Berkeley, Barratt Redrow and Persimmon are all higher this morning, notably head of figures from the latter two this week. Some of the impact of lower borrowing costs will be offset by the expected tax rise heading our way in the Budget, but further rate cuts also loom on the horizon, particularly if inflation keeps coming down too.” 10.36am GMT Over in Germany, investor morale has fallen unexpectedly this month. The ZEW economic research institute’s economic sentiment index has dropped to 38.5 points from 39.3 points in October, dashing hopes of a rise to 41. ZEW president Achim Wambach says: “The overall mood is characterised by a fall in confidence in the capacity of Germany’s economic policy to tackle the pressing issues.” 10.10am GMT 73% chance of rate cut in December The odds of a UK interest rate cut next month have risen towards 75% today, after unemployment jumped to 5% and wage growth slowed. The money markets now indicate there is a 73.6% chance of a rate cut in December, to 3.75%, and just a 26.4% prospect that the Bank of England leaves borrowing costs on hold again, at 4%. Before this morning’s labour market report, a December cut was seen as a 61.5% chance. Analysts at Japanese bank Nomura say: Today’s labour market report was weaker than expected, with the unemployment rate rising above consensus expectations to 5.0% in Q3, and private sector regular pay growth soft at 0.2% m-o-m in September. This follows soft labour market data in the previous report. However, policymakers left Bank Rate unchanged at the November MPC meeting last week, citing the need for an accumulation of evidence to support further policy loosening. Today’s data support a December Bank of England (BoE) rate cut, but we acknowledge that there are several more data releases, and also the budget, before then. We think these releases will add to reasoning for another 25bp cut at the next policy meeting. 9.52am GMT UK grocery inflation slows as supermarkets ramp up promotions UK grocery inflation has slowed, in a boost to households. Grocery price inflation slowed to 4.7% in October, data from Worldpanel by Numerator shows, as consumers bought more on deals. Just under 30% of grocery spending was on promoted items last month, they say, as consumers cut back ahead of the budget. Fraser McKevitt, head of retail and consumer insight at Worldpanel, explains: “Christmas ads are hitting our screens and the race to the big day is on in the supermarket sector. Retailers are very alive to the financial struggles that some households are facing, not least ahead of this year’s Budget. They’re eager to show how they’re offering shoppers value for money, putting the emphasis on price cuts rather than multibuy offers. It’s not just the Grinch who’s looking for savings with just shy of 30% of consumer spending at the grocers on promoted items in October, a figure that we expect to go even higher as we get closer to Christmas.” 9.34am GMT Back in the City, shares in AstraZeneca have hit a fresh record high. The move cements AstraZeneca’s position as the largest UK-listed stock by market value, with its value now approaching £210bn. Last week, the company announced stronger-than-expected quarterly earnings. But there is also doubt over its long-term commitment to the London market, after it decided in September to also list its shares directly on the New York Stock Exchange. Related: AstraZeneca’s listing rejig spells long-term danger for London | Nils Pratley 9.23am GMT Trump 'working on' a trade deal with Switzerland Donald Trump has said he is “working on a deal” to reduce the punitive 39% tariff he slapped on Switzerland in August, with expectations a deal aligning the country with the EU’s 15% could be sealed within the fortnight. Richemont and Swatch Group shares rose on Tuesday. Switzerland has been hit with one of the highest tariffs in the world baffling the country’s leaders and industries. “We’re working on a deal to get their tariffs a little bit lower,” Trump said. “I haven’t set any number, but we’re going to be working on something to help Switzerland,” he added on Monday night. Shares in the Watches of Switzerland group have rusen by more than 7% in early trading, while Swatch gained 4.2% and Richemont up 2%. “The talks are ongoing and we do not comment further,” a spokesman for the Swiss Department of Economic Affairs said. UPDATE: A Swiss source has told Reuters that a deal could come as early as Thursday or Friday this week… Updated at 10.59am GMT 9.18am GMT UK investors pull money from global equity funds at record pace Although the London stock market is at a new peak, we also have new data showing that UK investors have been pulling cash out of global share funds at a record pace. Global funds network Calastone has reproted that budget concerns and soaring share prices drove record outflows from equity funds in October. They have found that UK investors pulled £3.63bn out of equity funds in October, the fifth month of selling in a row – the longest stint of selling since the Brexit referendum in 2016. Since June, they say, £7.36bn has left equity funds, also a record. Calastone also reports: All equity categories saw net selling; UK funds lost £1.22bn in October alone. Global, North American and technology funds also saw heavy withdrawals. Investors shifted some of the capital to lower-risk assets, with a record £955m into money market funds and £589m into fixed income. Edward Glyn, head of global markets at Calastone says two forces are driving investor behaviour: One is simply nerves about global equity prices, especially in the US. Outflows from global, US and tech funds are all part of that story. Fears of high share prices also explain why money market and fixed income funds both had a good month -cash rolling out of equity funds needs somewhere to go, especially for those who don’t want to lose the tax protection of an ISA or pension wrapper. “The other force stems from growing concern about Rachel Reeves’s budget and the anticipated tax implications. For some, it’s a simple matter of crystallising capital gains in case rates go up. This drove a huge uptick in selling this time last year and it’s clearly round two in 2026. “For many others it’s about pensions. The tax-free lump sum that over 55s may draw from their pensions is such a vital part of most people’s retirement planning that the risk it will be scrapped or drastically scaled back is simply too concerning for many diligent pension savers in their 50s and beyond to contemplate. “Speculation on policy has made this drastic step the only rational choice for many, even if it may ultimately harm their longer-term financial goals.” 8.53am GMT Victoria Scholar, head of investment at interactive investor, points out that London’s stock market is outpacing the rest of Europe this morning: “After hitting a record closing high on Monday, fuelled by mining stocks, the FTSE 100 continues to push higher, gaining another 1% outperforming mainland Europe. Vodafone is leading the charge, up over 6% after raising its dividend and annual profit forecast. Housebuilders are also trading higher after the latest UK unemployment data fuels hopes of a December rate cut from the Bank of England. Fresnillo is in the green thanks to higher precious metals prices with gold continuing its ascent, rallying close to 3-week highs amid growing expectations that the Fed will cut interest rates next month. The pan-European Stoxx 600 is up 0.6% this morning, with Germany’s DAX up 0.2%. 8.48am GMT Market Report: UK wages pave way for rate cuts, US dip buyers’ cheer Here’s Matt Britzman, senior equity analyst at Hargreaves Lansdown, to explain why the London stock market has hit a new peak today: “The FTSE 100 has opened with a spring in its step, as cooling wage growth fuels hopes the Bank of England will cut rates in December. Private sector pay, a key metric for the committee, slowed to 4.2% in September, while broader wages undershot forecasts. Labour market signals are softening across the board, with payrolls falling again in October and unemployment nudging higher. Markets are now pricing in a 73% chance of a December rate cut, as the case for policy easing gains traction. Vodafone put on a confident face this morning, unveiling a new progressive dividend policy and guiding to the top end of FY26 expectations – the first signal that its self-declared growth phase is gaining traction. With pressure mounting ahead of the print, the return to service revenue growth in Germany marks a meaningful step in turning around its largest market. There’s still work to do, but the combination of upbeat commentary, improving momentum in the UK and Africa, and a stabilising European core should land well with investors. For a name priced for pessimism, today’s update offers a few glimmers of hope. Dip buyers are sitting pretty with US stocks rebounding yesterday evening, as optimism around a potential US government funding deal helped lift sentiment. Retail favourites like Palantir led the charge, while Nvidia clawed back recent losses, reminding markets why it’s still the poster child of the AI trade. The fundamentals behind the AI trade remain compelling - momentum may not be linear, but demand signals are hard to ignore. With earnings season winding down, all eyes now turn to Nvidia’s results next week, the final heavyweight test before year-end. 8.06am GMT FTSE 100 hits fresh record high The weakening UK jobs market hasn’t deterred traders from driving the UK stock market to a new record high. The FTSE 100 index of blue-chip shares, which closed at a record high last night, has jumped further at the start of trading. The FTSE 100 is up almost 1% in early trading, gaining another 97 points to hit a fresh intraday high of 9,884 points. Mobile network operator Vodafone are the top riser, up 4.4%, after raising its full-year outlook for earnings and cash flow this morning. Advertising group WPP (+2.9%) and pharmaceuticals giant AstraZeneca (+2.2%) are also in the top risers, along with UK housebuilders who would benefit from interest rate cuts. There is some general relief in the financial markets that the US government shutdown is close to ending, which lifted share prices yesterday. The weakness in the pound this morning, as traders anticipate interest rate cuts, will also push up the share prices of multinational firms listed in London (as it make their overseas earnings more valuable in sterling terms). Updated at 8.11am GMT 8.04am GMT Secretary of State for Work and Pensions, Pat McFadden, has insisted the government is taking steps to help people into work: “Over 329,000 more people have moved into work this year already, but today’s figures are exactly why we’re stepping up our plan to Get Britain Working. “We’ve introduced the most ambitious employment reforms in a generation to modernise jobcentres, expand youth hubs and tackle ill-health through stronger partnerships with employers. “And this week we’re going further by launching an independent investigation that will bolster our drive to ensure all young people are earning or learning. “We’re backing businesses to grow and create jobs by cutting red tape, signing trade deals and securing hundreds of billions in investment, which helped make the UK the fastest growing economy in the G7 in the first half of this year.” 7.59am GMT Deutsche Bank: Labour market data strengthens case for a Christmas rate cut Sanjay Raja. Deutsche Bank’s chief UK economist, says this morning’s jobs report strengthens the case for a Christmas rate cut, adding: Today’s data should give the MPC more confidence to cut Bank Rate further by year-end. Labour market slack continued to widen – even surprising market expectations. Pay momentum continued to slow, as expected. And while Budget uncertainty may be hampering hiring plans heading into Q4-25, one thing is clear: today’s data should continue to strengthen the case for a Christmas rate cut. 7.52am GMT Bank of England expected to cut interest rates as jobs market weakens Several economists are predicting the Bank of England could cut interest rates as soon as December, following this morning’s weak jobs report. And looking further ahead, the money markets are now indicating they expect 65 basis points of BoE rate cuts by the end of next year, up from 55 bps on Monday. That means two quarter-point cuts by December 2026 are fully priced in, with a third now more likely. Suren Thiru, economics director at ICAEW (the Institute of Chartered Accountants in England and Wales), reckons the odds of a rate cut next month have risen, now that unemployment has jumped to 5% and wage growth has slowed. “These figures suggest that the UK’s labour market is suffering from pre-Budget jitters, as businesses already weakened by April’s rise in national insurance look to cut recruitment further in anticipation of another difficult Budget. “This weakening in wage growth is likely to accelerate over the winter as the downward pressure from an ailing economy, significant staffing costs and more job losses increasingly restrains pay awards. “The jobs market could bear the brunt of Budget tax rises as weaker customer demand, amid a possible income tax hike and increasing costs on business, may mean higher unemployment than the Bank of England currently predicts. “These underwhelming figures add credence to the more dovish tilt to last week’s policy decision and the current rate at which the labour market is loosening notably increases the chances of a December interest rate cut.” Richard Carter, head of fixed interest research at Quilter Cheviot, points out that BoE governor Andrew Bailey is the ‘swing voter’ on its Monetary Policy Committee, who could be swayed into creating a majority for a cut: “An early Christmas present could come in the form of an interest rate cut from the Bank of England following a rise in unemployment and a softening in wage growth. The monetary policy committee had a tight 5-4 split on whether to hold or cut rates at last week’s meeting, with Andrew Bailey’s deciding vote erring on the side of caution. “Today’s figures from the Office for National Statistics show wage growth pressures, albeit still relatively high, are slowly easing. Annual growth in regular earnings excluding bonuses saw a decline to 4.6% compared to 4.7% last month, and total earnings including bonuses fell to 4.8% compared to 5%. Any further signs of easing in the next labour market print could sway a few more on the committee to cut on the 18th December. Thomas Pugh, chief economist at audit, tax and consulting firm RSM UK, points out that problems at the Office for National Statistics do make today’s data somewhat unreliable…. “A rise in the unemployment rate to 5.0% in September, the highest level since the pandemic, and a further slowing in private sector pay growth throws the door wide open to a December rate cut – as long as the budget is as deflationary as the Chancellor hinted at last week. “Overall, the labour market appears to still be weakening with the unemployment rate ticking up and employment falling on both the LFS and payrolls measures. Admittedly, the unemployment rate is being driven up by an erratic looking jump in unemployment on the single month figures. Even though the ONS has made improvements to the Labour Force Survey, which is where the official measures of employment statistics are derived from, it continues to be distorted by a low response rate making it less reliable than in the past. Updated at 8.10am GMT 7.45am GMT The business tax rises announced in last year’s budget, and uncertainty over what the chancellor will announce this time, are being blamed for the rise in UK unemployment. Isaac Stell, investment manager at tax advisory service Wealth Club, calls it a “self-inflicted wound”: There can be no doubt that the fiscal levers pulled by the Government and the Chancellor have significantly contributed to these figures and the responsibility lies at their feet. 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. The stakes couldn’t be higher for the government and with further tax rises guaranteed at the budget, the fiscal landscape for employers and employees looks to be on ever shakier ground.” Ashley Webb, UK economist at Capital Economics, also blames the rise in employer national insurance contributions for workforce cuts: The 32,000 fall in payroll employment in October was the eleventh monthly decline over the past year and suggests that businesses continued to trim headcounts after the Chancellor announced the rises in payroll taxes and the minimum wage in last year’s October Budget. Admittedly, the number of job vacancies paused its recent downward trend and remained broadly unchanged at 723,000 in the three months to Octobe 7.32am GMT Real wage growth slows too Inflation is taking a large chunk out of UK pay growth. While regular pay growth was 4.6% in July to September, that falls to just 0.8% in real terms once you adjust for CPI inflation. That’s down from 0.9% in the previous three-months. It was last lower than 0.8% in June to August 2023, when it was 0.7%. 7.30am GMT Public sector pay outpaces private sector Wage growth in the public sector was much more rapid than in the private sector over the summer, today’s jobs report shows. Annual average regular earnings growth was 6.6% for the public sector in July to September, compared with 4.2% for the private sector. The ONS cautions that the public sector annual growth rate is affected by some public sector pay rises being paid earlier in 2025 than in 2024, which caused a base effect. Reminder: overall regular pay growth slowed to 4.6%, which is the lowest since February to April 2022. 7.23am GMT This morning’s labour market report shows a jump in unemployment among men in the last couple of months. While the overall jobless rate has risen to 5% in July-September, up from 4.7% in April-June, there’s a clear gender split. Among men, joblessness is up from 4.8% to 5.4%, while among women it’s unchanged at 4.5%. The ONS says: In the latest quarter (July to September 2025), those unemployed for up to 6 months or over 12 months increased but the number of those unemployed between 6 and 12 months decreased. The number of people unemployed for up to 6 months, between 6 and 12 months, and over 12 months, increased over the year, since July to September 2024. The increase in the number of people unemployed in the latest quarter was the result of an increase in the number of unemployed men. We will explore this further as more data becomes available. 7.14am GMT Sterling drops after UK jobs report The pound has dropped by half a cent against the US dollar, as traders react to the jump in UK unemployment, and the slowdown in wage growth. This has pushed sterling down to $1.3123, and indicates the City may expect the Bank of England to respond by lowering interest rates. Last week, the Bank narrowly voted to leave borrowing costs unchanged, by fivevotes to four. Related: Bank of England opens door to December rate cut as it signals inflation has peaked Updated at 7.16am GMT 7.13am GMT Introduction: UK unemployment hits 5%, first time since 2021 Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The weakening in Britain’s jobs market has gathered pace, with new data showing the jobless rate has hit its highest level since the Covid-19 pandemic. The UK unemployment rate has jumped to 5% in the July to September quarter, the highest level since February 2021. That’s up from 4.8% a month earlier, and higher than expected. In another blow, the Office for National Statistics estimate that the number of employees on payrolls fell by 32,000 in September, and by another 32,000 in October to 30.3 million. And with the jobs market cooling, wage growth slowed too. Annual growth in employees’ average earnings slipped to 4.6% in the quarter, down from 4.7% in the three months to August. ONS director of economic statistics Liz McKeown says: “Taken together these figures point to a weakening labour market. The number of people on payroll is falling, with revised tax data now showing falls in most of the last 12 months. Meanwhile the unemployment rate is up in the latest quarter to a post pandemic high. The number of job vacancies, however, remains broadly unchanged. “Wage growth in the private sector slowed further, but we continue to see stronger public sector pay growth, reflecting some pay rises being awarded earlier than they were last year.” This jump in unemployment, and slowing wages, will heighten concerns that the economy is cooling – as Rachel Reeves prepares her budget due on 26 November – and could spur the Bank of England to cut interest rates again as soon as December. The agenda 7am GMT: UK labour market report. 8am GMT: UK grocery inflation report 10am GMT: ZEW eurozone economic confidence index 11am GMT: US NFIB Business Optimism Index 2.30pm GMT: Business Secretary Peter Kyle makes first appearance at Business and Trade committee Updated at 7.16am GMT