UK unemployment falls to 4.7% before budget

Britain's unemployment rate fell to 4.7 percent in the three months to the end of August, the Office for National Statistics said Tuesday, ahead of the Labour government's budget update next week.

The ONS said the rate was the lowest since the three months to the end of July 2025.

Prime Minister Andy Burnham has said difficult decisions will be needed in the October 28 budget presentation. Rising youth unemployment remains a concern for the government, which has made tackling the cost of living part of its agenda.

Burnham wrote in The Times that Britain faced an “economic catastrophe and moral failure” because around one million 16- to 24-year-olds were not in employment, education or training.

A government-commissioned review into youth unemployment, led by former Labour cabinet minister Alan Milburn, is due to publish proposed solutions next month. The government also outlined plans to recruit thousands more apprentices under the age of 25 in sectors including accounting, law and consulting.

Richard Carter, head of fixed interest research at Quilter Cheviot, said signs that the labour market may be stabilising were welcome, but that the recovery remained fragile.

Finance minister John Healey, who will present the budget, has pledged to maintain strict fiscal discipline.