Jobs market decline fuels hope for cut in interest rate

THE jump in jobless figures combined with a softening of private sector wage growth is driving up expectations of a Bank of England interest rate cut in mid-December.

- Mauricio Alencar

The unemployment rate rose to 5% yesterday, higher than economists expected. Meanwhile, wage growth fell back slightly to 4.6% in the three months to September compared with a year earlier, according to Office for National Statistics data.

Private sector wage growth over the same period — a figure the Bank's Monetary Policy Committee monitors closely — slowed further to 4.2%.

Markets are now pricing in a three-in-four chance of a rate cut in December, which is higher than previously anticipated.