Rolling coverage of the latest economic and financial news, including the UK jobs report for October-December 2025
The chances of a cut to UK interest rates next month have risen, following this morning’s data showing a rise in unemployment and a slowdown in wage growth.
The City money markets now indicate there’s a near-75% chance that the Bank of England lowers interest rates to 3.5% at its next meeting, in March, up from 69% last night.
Unemployment is up and hiring surveys are still getting worse. That said, the weakness is still heavily concentrated in consumer-facing industries – a legacy of last year’s sizable payroll tax (National Insurance) and National Living Wage increases. Hospitality payrolled employment may be down almost 3% since the start of 2025, but it is still 2% higher than pre-Covid levels. Yet economic output is still 6% below – suggesting the loss of jobs may have further to run.
Outside of these consumer-centric industries, the story looks more benign. Employment is still trending down across the wider private sector on a three-month average of payrolls growth, but only slightly. We’re also not seeing a particularly noticeable pick-up in redundancies across the economy. Vacancy numbers have stopped falling, too.
“Today’s data raises the prospect of the Bank of England resuming cutting interest rates in March. The MPC will be reassured by further evidence of pay pressures easing, and the labour market continuing to soften. The Bank may also want to minimise downside risks to the labour market and lower rates ahead of the next forecast meeting in April.
“Headline pay growth eased in December, falling from 4.4% to 4.2%. The fall in headline pay was partly driven by an easing in public sector wage settlements, which fell for the first time since July 2025. Demand for labour remains weak which has curtailed workers’ bargaining power, meanwhile falling costs for households should also temper pay demand amongst workers. We expect pay growth to fall to 3% by the end of 2026.
“Following a November where hiring plans were put on hold due to the budget, things are yet to get going again, potentially highlighting the longer-term impacts of increases costs that businesses have faced.
Increased minimum wage costs, national insurance contributions, business rates and concerns around the impact of the Employment Rights Act continues to show up in the data and appears to be putting a weight on the economy. Economic indicators were beginning to shine some positivity but that has arguably been wiped by this latest data.
“There are strong signs that the labour market is continuing to loosen as wage growth including bonuses has eased to 4.2% and the rate of unemployment has risen to 5.2%.
“Wage growth is being propped up by the public sector and the number of unemployed people per vacancy now sits at 2.6, the highest in more than 10 years if the pandemic period is excluded.
“While overall employment appears broadly stable and the rise in redundancies has slowed, the pain is not evenly spread. Young people, disabled people and men are bearing the brunt of the rise.
“Youth unemployment is now at 14.0%, the highest rate for five years. This is particularly concerning as the number of 18-24 year olds out of work has jumped by 80,000 on the quarter to 575,000. More young people are actively seeking work, but too many are struggling to secure it.
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© Photograph: Andy Rain/EPA
© Photograph: Andy Rain/EPA
© Photograph: Andy Rain/EPA
Despite the best efforts of the fine cast this psychological thriller about a war correspondent returning to her home town falls short of exploring the full scope of family trauma
Fans of Nuala Ellwood’s bestselling psychological thriller about a war reporter revisiting the horrors of her childhood in Herne Bay may decide to stick with the book after this drab adaptation. Like a black sock that has infiltrated a wash-load of white bedsheets, the story has come out a dreary dull grey. The movie is stubbornly unintriguing despite a fine cast of actors doing their utmost. Even the almighty twist ending fails to pick up the pace.
Jenny Seagrove plays Kate Rafter, a hardened correspondent haunted by PTSD. She’s back from a stint in Aleppo for her mum’s funeral and staying in her childhood home. Seagrove plays it imperiously, eyes flashing; Kate has witnessed terrible atrocities, and seems irritated by the smallness of the lives in her home town. But she is raw and damaged; there are flashbacks to Iraq where she befriended a young boy, and some unconvincing scenes of sessions with a psychologist trying to unpick the trauma of her childhood in a home terrorised by a violent alcoholic father. When Kate starts hearing a child crying in the next door house, no one believes her.
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© Photograph: Everett Collection Inc/Alamy
© Photograph: Everett Collection Inc/Alamy
© Photograph: Everett Collection Inc/Alamy
Three women, two real and one fictional, seek social justice in an ambitious novel that explores power in 1970s America
What kind of justice can we have in a world driven by power? The actor turned writer Sophie Ward likes to fuel her novels with philosophical conundrums and set herself complex writerly challenges. Her ingenious, Booker-longlisted Love and Other Thought Experiments was structured around philosophical thought experiments, from Pascal’s Wager to Descartes’ Demon, with a chapter narrated by an ant living inside a character’s brain. The Schoolhouse explored the ethics of self-directed schooling and of policing in a complicated cross-period procedural. Now she turns her attention to questions of justice, freedom and power in the 1970s United States, with a tripartite structure bringing together three women – two real and one imagined.
It’s 1971: the Manson Family have just been found guilty and hundreds of thousands are marching against the Vietnam war. In the Netherlands, 25-year-old Andrea Dworkin escapes her abusive husband and attends a debate between Chomsky and Foucault on justice and power. Back in the US, the poet Muriel Rukeyser throws herself into protesting once again, though her lover, the literary agent Monica McCall, tells her rightly that her health won’t stand it. The third character is loosely based on the family history of Ward’s own Korean-American wife. Phyllis Patterson welcomes her son home to rural Illinois from the army base in South Korea, and attempts to build a relationship with her new Korean daughter-in-law and grandchildren. All three women are testing their own capacity for justice in an unjust world.
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© Photograph: Leo Holden
© Photograph: Leo Holden
© Photograph: Leo Holden
The iconic photographer believed his two years shooting horse fairs, pubs and dance halls in the 1980s had been overlooked. A new exhibition aims to put that right
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© Photograph: Martin Parr/Magnum Photos
© Photograph: Martin Parr/Magnum Photos
© Photograph: Martin Parr/Magnum Photos
Many women reading this will have experienced something similar: a warning that sharing public space isn’t a man’s job, it’s a woman’s
What motivates a stranger to push a woman in public? That’s a question I’ve been stuck on this week after a man shoved me out of his way on an empty pedestrian street. I didn’t even see him coming – well, I wouldn’t have, as he came up from behind me.
I had walked in his path, he barked at me. “What path?” I thought, baffled, as I took in the huge expanse of empty pavement around us. I was so stupefied by the encounter that I found myself frozen to the spot, watching him walk away in his blue anorak and technical rucksack. He could have been any man from anywhere on his way to work.
Lucy Pasha-Robinson is a Guardian assistant Opinion editor
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© Photograph: Teri Pengilley/The Guardian
© Photograph: Teri Pengilley/The Guardian
© Photograph: Teri Pengilley/The Guardian
Tarique Rahman set to take oath and become prime minister after landslide victory prompted by ousting of Sheikh Hasina
Bangladesh’s incoming prime minister Tarique Rahman and other politicians were sworn into parliament on Tuesday, becoming the first elected representatives since a deadly 2024 uprising.
Rahman is set to take over from an interim government that has led the country of 170 million people for 18 months since the autocratic government of Sheikh Hasina was overthrown.
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© Photograph: Mohd Rasfan/AFP/Getty Images
© Photograph: Mohd Rasfan/AFP/Getty Images
© Photograph: Mohd Rasfan/AFP/Getty Images
Reina Sofía’s three-year rehang of works by artists from Spain and beyond is billed as a ‘critical reinterpretation’
The Reina Sofía’s new rehang opens, quite pointedly, with a painting of a detained man sitting, head bowed and wrists shackled, as he waits for the arbitrary hand of institutional bureaucracy to decide his fate.
The picture, Document No …, was painted by Juan Genovés in 1975, the year Francisco Franco died and Spain began its transition to democracy after four decades of dictatorship. Genovés’s faceless, everyman victim of the Franco regime’s control and repression is the natural starting point for the Madrid museum’s exploration of the past 50 years of contemporary art in Spain.
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© Photograph: Roberto Ruiz/© Juan Genovés, VEGAP, Madrid, 2026
© Photograph: Roberto Ruiz/© Juan Genovés, VEGAP, Madrid, 2026
© Photograph: Roberto Ruiz/© Juan Genovés, VEGAP, Madrid, 2026
This bold, traditional taste of Vietnam is a joy both by name and to eat
There’s something endearing and confident about a dish named after the feeling it gives you. Bánh khoái means “delight” or “joy” cake. This crisp, savoury pancake originates from Hue, the historic capital of Vietnam’s central region. Traditionally served with a rich hoisin dipping sauce, my take swaps that out for a lighter nước chấm with sesame seeds. It stays true to the spirit of the original, though, preserving its joyful texture and bold, satisfying flavours, while using more accessible ingredients.
This recipe is an edited extract from One Pan Vietnam, by Thuy Diem Pham, published by Quadrille at £22.
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© Photograph: Ola O Smit/The Guardian. Food and prop styling: Kitty Coles
© Photograph: Ola O Smit/The Guardian. Food and prop styling: Kitty Coles
© Photograph: Ola O Smit/The Guardian. Food and prop styling: Kitty Coles
Selectors under fire after Steve Smith unused against Sri Lanka
Fate now rests with Ireland and Sri Lanka beating Zimbabwe
Australia’s aura as a white-ball heavyweight has all but petered out in the space of two disastrous defeats at the T20 World Cup where the absence of their champion fast bowlers has been ruthlessly exposed.
Following an abject 23-run defeat to world No 11 Zimbabwe, Australia crashed to an eight-wicket loss to co-hosts Sri Lanka in Kandy on Monday to be pushed to the brink of a humiliating exit.
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© Photograph: Sameera Peiris-ICC/ICC/Getty Images
© Photograph: Sameera Peiris-ICC/ICC/Getty Images
© Photograph: Sameera Peiris-ICC/ICC/Getty Images
London police say criminal gangs are using Snapchat to offer cash rewards of up to £380 for stolen iPhones
Gangs are recruiting children to go out to steal smartphones before they head to school, using Snapchat to offer rewards of up to £380 for the latest Apple iPhones, police have revealed.
The Metropolitan police said they were deploying new resources including drones and Surron ebikes to chase suspects as they step up their fight against phone snatching.
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© Photograph: Metropolitan Police
© Photograph: Metropolitan Police
© Photograph: Metropolitan Police
Brentford coach praises non-league side’s advances
Manager John Rooney proud of Macclesfield’s efforts
Keith Andrews made a beeline for the Macclesfield dressing room after Brentford’s fourth-round FA Cup victory at Moss Rose and told John Rooney and his players they had been immense against his Premier League charges.
The Brentford head coach said footballing journeys like the one Macclesfield have enjoyed since their rebirth “fills my heart” as he waxed lyrical about the true test his team were given by the National League North outfit.
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© Photograph: Max Tomlinson/Focus Images Ltd/Shutterstock
© Photograph: Max Tomlinson/Focus Images Ltd/Shutterstock
© Photograph: Max Tomlinson/Focus Images Ltd/Shutterstock
Khan’s sons say that during a call with their father, he claimed he had "been denied treatment” for a few months
© Photo/K.M. Chaudary, File
The government agreed to pay Reform UK’s legal costs after the party’s challenge over the postponement of local elections
© AFP/Getty
© Getty Images/iStockphoto
Ten nations are competing in each of curling’s three disciplines at the 2022 Winter Olympics
© REUTERS
© John Lewis/PA
Warnings for rain, ice, and flooding are in place for much of the country
© PA
Documentarian behind critically praised works such as ‘Titicut Follies’ and ‘Ex Libris’ received an honorary Oscar in 2016
© Getty Images
As the Year of the Fire Horse thunders in, according to Chinese custom, there are certain things you need to avoid if you want good fortune for the rest of the year. And woe betide if you argue today, says Karen Gray, who is embracing her inner Chinese auntie like never before
© Reuters
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