U.K. Employment Drops Amid Rising Economic Inactivity

By Wiktor Szary and Toby Luckhurst Features Dow Jones Newswires

The U.K.'s employment numbers fell for the first time in almost two years in the three months through September, as the number of people dropping out of the workforce rose significantly, new figures showed, signaling weakness in the until-recently red hot labor market.

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The U.K. Office for National Statistics said Wednesday Britain's jobless rate remained unchanged at 4.3% in the three months through September--the lowest level in more than 40 years.

But the overall employment number dropped by 14,000 in the July-September period, the first decline since 2015. At the same time, the number of economically inactive Britons--those neither working nor seeking employment--rose by 117,000, the biggest increase in seven years.

Separately, the figures showed that U.K. workers' inflation-adjusted wages fell for the seventh consecutive month in September, highlighting a continued living-standards squeeze that has been evident since last year's Brexit vote.

Average annual wage growth was unchanged at 2.2% in the three-month period, meaning that Britons' wages fell by 0.5% when adjusted for inflation, a worrying sign for the country's largely domestic-driven economy.

British economic growth slowed visibly this year as complex Brexit negotiations soured business confidence and accelerating inflation--fueled by the pound's collapse in the wake of the Brexit vote last year--hit household spending.

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Consumer prices rose in October at their joint-fastest annual rate for more than five years, registering the ninth consecutive month of above-target inflation.

Earlier this month the Bank of England raised its benchmark interest rate from 0.25% to 0.5%, the first increase in borrowing costs in a decade, as it attempts to get inflation under control.

Write to Wiktor Szary at wiktor.szary@wsj.com and Toby Luckhurst at toby.luckhurst@wsj.com

(END) Dow Jones Newswires

November 15, 2017 04:54 ET (09:54 GMT)