The state pension is likely to rise by 4.7% in April, after the latest official figures showed this was the pace of wage growth.

The pension is determined by the triple lock, which means it will rise every year by whichever is highest: inflation in September, average weekly earnings from May to July or 2.5%.

Inflation in September is expected to be 4% by the Bank of England, meaning wage data, released by the Office for National Statistics (ONS) on Tuesday, is set to be the highest figure.

Government retains control of pension increases and, despite commitments, could decide not to abide by the triple lock.

The new pension sum will start being paid in April, and if increased by 4.7% would reach £12,534.60, above £12,000 for the first time.

A political challenge

Despite the significant cost implications for the state, Work and Pensions Secretary Pat McFadden said the government was committed to the triple lock.

“The OBR estimates that will mean a rise in the state pension of around £1,900 a year over the course of the Parliament… that’s something that we said we will do in the election and something that we will keep to.”

It’s likely to be a headache for Chancellor Rachel Reeves as she struggles to stick within her self-imposed fiscal rules to reduce government debt and balance the budget.

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While the average weekly earnings measure of wage growth rose, up from 4.5% a month earlier, another form slowed. Earnings excluding bonuses dropped from 5% to 4.8% across the month.

It means pay is still rising faster than inflation, which was 3.8% at the latest reading, and wage growth is high by historical standards.

A tough job market

The data was not so positive for those looking for a job. There are fewer vacant roles and fewer people on payrolls, the ONS said.

Compared to a year earlier, there were 127,000 fewer payrolled employees in August, provisional estimates show.

There were estimated to be 10,000 fewer vacancies from June to August 2025, marking the 38th consecutive period of vacancy drops.

The drops have decreased from previous months, suggesting the worst of the industry reaction to increased employers’ national insurance contributions and minimum wage rises.

Vacancies decreased in nine of the 18 industry sectors. Statistics also released on Tuesday showed a record 2.07 million people are working for the NHS.

The unemployment rate, however, remained at 4.7%.

The ONS continued to advise caution when interpreting changes in the monthly unemployment rate due to concerns over the figures’ reliability. The exact number of unemployed people is unknown, due to low survey response rates.

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Google is set to invest £5bn in the UK in the next two years, to support growing demands for AI services.

The announcement, which comes as Google opens a new data centre in Waltham Cross in Hertfordshire, is expected to contribute to the creation of thousands of jobs, the US tech giant said.

Chancellor Rachel Reeves described it as a “vote of confidence” in the UK economy.

The news comes hours before Donald Trump lands in the UK for a state visit at which he and Sir Keir Starmer are widely expected to sign a new UK-US tech deal.

It also follows reports that ChatGPT parent firm OpenAI, and Nvidia, will also unveil billions of dollars’ worth of investment into UK data centres this week.

The chancellor said the investment would boost research and development, capital expenditure and engineering.

However, Liberal Democrat leader Sir Ed Davey has criticised the proposed deal as a “Silicon Valley stitch-up”, and has demanded that the government put it to a vote in parliament.

He said: “I am really concerned the government is going to agree to a Silicon Valley stitch-up that hands tax cuts to tech billionaires while undermining protections for our children online.”

Sir Ed added: “Parents want protections for children online to be kept in place, not traded away in a backroom deal with tech barons.

“We can’t let the government sign up to a deal that benefits Elon Musk at the expense of the British people.”

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Google has confirmed it will invest £5bn into capital expenditure, research and development, and related engineering over the next two years, which will include “pioneering” AI research in science and healthcare through its DeepMind operation.

The Silicon Valley firm said the investment will help the UK grow its AI economy and contribute to technological breakthroughs, improvements in cybersecurity and job creation.

Google predicted the investment will help to create 8,250 jobs annually at UK businesses.

DeepMind co-founder and chief executive Demis Hassabis said: “We founded DeepMind in London because we knew the UK had the potential and talent to be a global hub for pioneering AI.

“The UK has a rich history of being at the forefront of technology – from Lovelace to Babbage to Turing – so it’s fitting that we’re continuing that legacy by investing in the next wave of innovation and scientific discovery in the UK.”