Inflation warning as workers urged to save wage increase before rises crush cash | Personal Finance | Finance

Ms Coles said: “The employment picture remained relatively static over the month, with employment, unemployment and inactivity levels staying roughly the same.

“Unfortunately, this is likely to be a pause rather than a plateau. The Office for Budget Responsibility has forecast something of a gathering storm, with unemployment hitting 4.7 percent at the end of next year, five pecent the year after that and 5.1 percent by the last three months of 2026. This isn’t just higher than it previously expected, the rises are expected to go on for longer too.”

Alice Haines, personal finance analyst at Bestinvest, also encouraged people to plan ahead. She said: “With wage growth and the jobs market likely to soften further from here, as more people chase fewer jobs and redundancies rise, lingering economic uncertainty means employers may be hesitant to commit to permanent new hires as they plan budgets for the new year.

“People should prepare their finances for all eventualities, including the possibility of job loss. Building up a robust rainy-day fund is likely to become the most essential New Year’s resolution to commit to at the start of 2024.”

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