The unemployment rate in the United Kingdom has risen to 5.2 percent, the highest level in five years, according to new figures.

Data released by the Office for National Statistics showed a slight increase from 5.1 percent recorded in the previous three-month period. The latest figure is the highest since early 2021, when the economy was still affected by the pandemic.

Officials say the rise reflects weakening hiring activity and a drop in payroll numbers toward the end of 2025. ONS statistics director Liz McKeown explained that fewer companies are adding new staff, a sign that businesses remain cautious. The trend suggests the labour market is slowing as economic growth struggles to gain momentum.

Analysts believe the fresh data could influence the Bank of England to lower interest rates soon. Expectations of a possible rate cut have already put pressure on the British currency. Investment manager Jonathan Raymond of Quilter Cheviot noted the job market appears strained at a time when economic expansion is limited.

Meanwhile, wage growth slowed to 4.2 percent in the last quarter, adding to signs of cooling economic activity. Inflation is projected to ease in coming months, which may shape future monetary policy decisions. Economists say the coming weeks will be crucial in determining whether the slowdown deepens or stabilises.