Jobless rate hits four-year high- but makes interest rate cut more likely

Published

2 months ago

July 17, 2025

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The UK’s unemployment rate has risen to a four-year high, in a surprise deterioration that boosts the case for a Bank of England interest rate cut.

The Office for National Statistics (ONS) reported a rise in the jobless rate from 4.6% to 4.7% in the three months to May.

No change had been expected after the 0.1 percentage point rise seen just last month.

The ONS data, which still comes with a health warning due to poor participation rates, also showed a reduction in the pace of wage rises, with average weekly earnings rising by 5%. That was down from the 5.2% level reported a month ago.

Money latest: The rising cost of airport drop-off fees

ONS director of economic statistics, Liz McKeown, said of its findings: “The labour market continues to weaken, with the number of employees on payroll falling again, though revised tax data shows the decline in recent months is less pronounced than previously estimated.

“Pay growth fell again in both cash and real terms, but both measures remain relatively strong by historic standards.

“The number of job vacancies is still falling and has now been dropping continuously for three years.”

The data was released 24 hours after a surprise rise in the rate of inflation, to 3.6%, was revealed by the ONS.

It was seen as muddying the waters as the Bank considers the timing of its next interest rate cut.

But a quarter point reduction, to 4%, is widely expected at the next meeting of the rate-setting committee in early August,

The Bank, experts say, will be looking past the headline inflation numbers and see scope to introduce the third cut of the year due to the softening labour market seen in 2025 – a factor the Bank’s governor Andrew Bailey had suggested would come more into focus in a recent interview with The Times.

Weaker pay awards remain a compulsory element to bringing down borrowing costs as there are fears the UK’s difficulties in bringing down inflation are partly linked to wage growth outpacing price hikes since August 2023.

Add to that the slowdown in economic growth and you have a Bank seemingly grappling the effects of so-called stagflation – as scenario of weak growth with inflation persistently well above the Bank’s 2% target.

While there are conflicting forces at play for the Bank’s interest rate deliberations, rising inflation, coupled with weakening growth and jobs data, are all unwelcome for a chancellor under growing pressure.

Rachel Reeves was accused on Wednesday of contributing to inflation through taxes on employment deployed from April – with industry bodies in the grocery sector claiming an element of rising food price growth was down to businesses passing on those extra costs, alongside hikes to minimum pay requirements.

At the same time, those budget measures have clearly held back hiring since the spring.

One crumb of comfort for her is that the prospect of a rate cut next month remains on – with any reduction helping bring down the cost of servicing government debt as the headroom she has within the public finances remains under severe pressure.

Government U-turns on winter fuel payment curbs and welfare reforms have squeezed her fiscal rules, leaving her to cover likely at the autumn budget to cover shortfalls either through further tax hikes or spending cuts.

Yael Selfin, chief economist at KPMG UK, said of the rate cut prospects: “Slowing activity in the labour market, coupled with pay pressures easing, will likely prompt the Bank of England to lower interest rates next month.

“The impact of April’s tax and administrative changes has led to a marked slowdown in hiring activity among firms. With domestic activity remaining sluggish, the MPC will likely want to provide support via looser policy to prevent a more significant deterioration in the labour market.”

Business

Trump reveals Rupert and Lachlan Murdoch could be involved in TikTok deal

Published

5 hours ago

September 22, 2025

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Trump reveals Rupert and Lachlan Murdoch could be involved in TikTok deal

Donald Trump has revealed that media mogul Rupert Murdoch and his son Lachlan could be part of a deal in which TikTok in the United States will come under American control.

The US president also namedropped Michael Dell, the founder and CEO of Dell Technologies, as a possible participant in the deal during an interview with Fox News, which is owned by the Murdochs.

“I think they’re going to be in the group. A couple of others. Really great people, very prominent people,” Mr Trump said. “And they’re also American patriots, you know, they love this country. I think they’re going to do a really good job.”

Mr Trump said that Larry Ellison, founder and CEO of software firm Oracle, was part of the same group. His involvement in the potential TikTok deal had previously been revealed.

White House press secretary Karoline Leavitt said on Saturday that Oracle would be responsible for the app’s data and security, with Americans set to control six of the seven seats for a planned TikTok board.

This comes after Mr Trump said he and China’s Xi Jinping held a “very productive call” on Friday, discussing the final approval for the TikTok deal, much of which is still unknown.

Once confirmed, the deal should stop TikTok from being banned in the US after lawmakers decided it posed a security risk to citizens’ data.

Officials warned that the algorithm TikTok uses is vulnerable to manipulation by Chinese authorities, who can use it to push specific content on the social media platform in a way that is difficult to detect.

Congress had ordered the app shut down for American users by January 2025 if its Chinese owner ByteDance didn’t sell its assets in the country – but the ban has been delayed four times by President Trump.

Mr Trump said on Sunday that he might be “a little prejudiced” about TikTok, after telling reporters on Friday: “I wasn’t a fan of TikTok and then I got to use it and then I became a fan and it helped me win an election in a landslide.”

After the call with Mr Xi, Mr Trump said in a Truth Social post: “We made progress on many very important issues, including Trade, Fentanyl, the need to bring the War between Russia and Ukraine to an end, and the approval of the TikTok Deal.”

Mr Trump later told reporters at the White House that Xi had approved the deal, but said it still needed to be signed.

Representatives for the Murdochs, Mr Dell and Mr Ellison have not yet commented on a potential TikTok deal.

Business

Gatwick second runway given green light by government

Published

5 hours ago

September 22, 2025

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Gatwick second runway given green light by government

Gatwick’s second runway has been given the go-ahead by the government.

The northern runway already exists parallel to Gatwick‘s main one, but cannot be used at the same time, as it is too close.

It is currently limited to being a taxiway and is only used for take-offs and landings if the main one has to shut.

The £2.2bn expansion project will see it move 12 metres north so both can operate simultaneously, facilitating 100,000 extra flights a year, 14,000 jobs, and £1bn a year for the economy.

It would also mean the airport could process 75 million passengers a year by the late 2030s.

Gatwick is already the second busiest airport in the UK, and the busiest single runway airport in Europe.

No public money is being used for the expansion plan, which airport bosses say could see the new runway operational by 2029.

The expansion was initially rejected by the Planning Inspectorate over concerns about its provisions for noise prevention and public transport connections.

Campaigners also argued the additional air traffic will be catastrophic for the environment and the local community.

A revised plan was published by the planning authority earlier this year, which it said could be approved by the government if all conditions were met.

The government says it is now satisfied this is the case, with additions made including Gatwick being able to set its own target for passengers who travel to the airport by public transport – instead of a statutory one.

Nearby residents affected by noise will also be able to charge the airport for the cost of triple-glazed windows.

And people who live directly under the flight path who choose to sell their homes could have their stamp duty and estate agent fees paid for up to 1% of the purchase price.

CAGNE, an aviation and environmental group in Sussex, Surrey, and Kent, says it still has concerns about noise, housing provision, and wastewaster treatment.

The group says it will lodge a judicial review, which will be funded by local residents and environmental organisations.

‘Disaster for the climate crisis’

Green Party leader Zack Polanski criticised the second runway decision, posting on X: “Aviation expansion is a disaster for the climate crisis.

“Anyone who’s been paying any attention to this shambles of a Labour Govenrment (sic) knows they don’t care about people in poverty, don’t care about nature nor for the planet. Just big business & their own interests.”

Friends of the Earth claimed the economic case for the airport expansion has been “massively overstated”.

Head of campaigns Rosie Downes warned: “If we’re to meet our legally-binding climate targets, today’s decision also makes it much harder for the government to approve expansion at Heathrow.”

Shadow transport secretary Richard Holden welcomed the decision but said it “should have been made months ago”, claiming Labour have “dithered and delayed at every turn”.

“Now that Gatwick’s second runway has been approved, it’s crucial Labour ensures this infrastructure helps drive the economic growth our country needs,” he said.

A government source told Sky News the second runway is a “no-brainer for growth”.

“The transport secretary has cleared Gatwick expansion for take-off,” they said. “It is possible that planes could be taking off from a new full runway at Gatwick before the next general election.

“Any airport expansion must be delivered in line with our legally binding climate change commitments and meet strict environmental requirements.”

Business

TalkTalk Group picks bankers to spearhead break-up

Published

2 days ago

September 20, 2025

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TalkTalk Group picks bankers to spearhead break-up

TalkTalk Group has picked advisers to spearhead a break-up that will lead to the sale of one of Britain’s biggest broadband providers.

Sky News has learnt that PJT Partners, the investment bank, is being lined up to handle a strategic review aimed at assessing the optimal timing for a disposal of TalkTalk’s remaining businesses.

PJT’s appointment is expected to be finalised shortly, City sources said this weekend.

Founded by Sir Charles Dunstone, the entrepreneur who also helped establish The Carphone Warehouse, TalkTalk has 3.2 million residential broadband customers across the UK.

That scale makes it one of the largest broadband suppliers in the country, and means that Ofcom, the telecoms industry regulator, will maintain a close eye on the company’s plans.

The break-up is expected to take some time to complete, and will involve the separate sales of TalkTalk’s consumer operations, and PlatformX, its wholesale and network division.

Within the latter unit, TalkTalk’s ethernet subsidiary could also be sold on a standalone basis, according to insiders.

TalkTalk, which has been grappling with a heavily indebted balance sheet for some time, secured a significant boost during the summer when it agreed a £120m capital injection.

The bulk of those funds came from Ares Management, an existing lender to and shareholder in the company.

That new funding followed a £1.2bn refinancing completed late last year, but which failed to prevent bondholders pushing for further moves to strengthen its balance sheet.

Over the last year, TalkTalk has slashed hundreds of jobs in an attempt to exert a tighter grip on costs.

It also raised £50m from two disposals in March and June, comprising the sale of non-core customers to Utility Warehouse.

In addition, there was also an in-principle agreement to defer cash interest payments and to capitalise those worth approximately £60m.

The company’s business arm is separately owned by TalkTalk’s shareholders, following a deal struck in 2023.

TalkTalk was taken private from the London Stock Exchange in a £1.1bn deal led by sister companies Toscafund and Penta Capital.

Sir Charles, the group’s executive chairman, is also a shareholder.

The company is now run by chief executive James Smith.

The identity of suitors for TalkTalk’s remaining operations was unclear this weekend, although a number of other telecoms companies are expected to look at the consumer business.

Britain’s altnet sector, which comprises dozens of broadband infrastructure groups, has been struggling financially because of soaring costs and low customer take-up.

On Saturday, a TalkTalk spokesman declined to comment.