Jobs market slowdown likely to become policy focus and will also have impact on interest rates decision

• UK unemployment rose to four-year high of 5.1% before budget

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When Labour came to power, it set a “long-term ambition” of increasing the employment rate – the share of the working age population with a job – to 80%. The latest data suggest things are moving in the wrong direction.

The employment rate in the three months to October was 74.9%, according to the Office for National Statistics (ONS), down 0.3 percentage points on the quarter.

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ING’s UK economist James Smith has spotted that government hiring is no longer supporting the jobs market.

He writes:

Companies – especially in retail and hospitality – have been shedding workers this year, partly because of earlier tax and minimum wage hikes. Hiring surveys remain weak.

Until recently, that was helpfully offset by resilience in government hiring, but that appears to be changing. Public sector employment has also now fallen for three consecutive months, judging by those payroll numbers.

Resolution Foundation report comes in week when data is expected to show October unemployment rise

Young people are bearing the brunt of Britain’s jobs downturn, according to a report, before official figures this week that are expected to show the UK unemployment rate rising to 5.1%.

The Resolution Foundation thinktank said a “jobs deficit” was pushing a growing number of graduates and non-graduates into unemployment as employers reduced hiring.