Unemployment in the UK rises to to 5% : ONS

London -  The rate of unemployment in the UK has risen to 5% in the three months to September, according to the Office for National Statistics (ONS).

It is the highest rate since the period covering December 2020 to February 2021, the ONS said.

The increase in the unemployment rate was higher than expected, coming in above the 4.9% projected by many analysts ahead of the Budget on 26 November.

"The number of people on payroll is falling, with revised tax data now showing falls in most of the last 12 months," ONS director of economic statistics Liz McKeown said in comments accompanying the latest figures.

The data deals a further blow to Prime Minister Keir Starmer's ruling Labour party, which is trailing badly in popularity polls 16 months after winning a general election.

Britain’s Finance minister Rachel Reeves has indicated that taxes will rise in the budget to help drive down government debt and to fund public services.

The UK's central bank said unemployment in the coming years is expected to stay close to 5%.

Liz McKeown, director of economic statistics for the ONS, said: "Taken together, these figures point to a weakening labour market.

"Meanwhile the unemployment rate is up in the latest quarter to a post pandemic high. The number of job vacancies, however, remains broadly unchanged."

Minister for Work and Pension, Pat McFadden acknowledged "there are challenges in the Labour market" but insisted the "British economy is still generating jobs."

He said he was "concerned by the growth" in the number of young people not in employment or training over the past five years.

Shadow work and pensions secretary Helen Whately blamed increased unemployment on government's policies, which were "hiking up taxes on jobs, piling red tape on businesses, and destroying confidence in the economy".

The ONS data shows nearly 1.7 million people are claiming unemployment benefits, a slight decrease on the figure from a year ago.

Job vacancies saw a small uplift, rising by 2,000 to 723,000 between August and October 2025 compared to the previous quarter.

The statistics also show a difference between public sector wage growth, up 6.6%, compared to the private sector, which grew by 4.2%.