Britain's unemployment rate rose for the second month in a row and there were other signs of a cooling labour market in data published.

Britain's unemployment rate rose for the second month in a row and there were other signs of a cooling labour market in data published on Tuesday, including an increase in older people saying they were looking for work

But the Bank of England - which looks set to raise interest rates for the ninth consecutive meeting on Thursday - was likely to note the strongest rise in basic pay on record not including the period around the COVID-19 pandemic.

Sterling rose against the U.S. dollar and the euro after the figures were published by the Office for National Statistics.

The ONS said the unemployment rate increased to 3.7% in the three months to October, up from 3.6% in the three months to September.

The highest growth since records began in 2001, excluding increases during the COVID-19 era that were distorted by lockdowns and government support measures, was ordinary pay, which increased by a stronger-than-expected 6.1% in the August to October period.

The ONS reported a 6.1% yearly rise in total compensation, including bonuses.

Both wage indices kept falling short of inflation, which reduced people's purchasing power.

According to the ONS, the percentage of persons who are neither working nor seeking for employment decreased in the three months leading up to October to 21.5%, a 0.2 percentage point decrease over the prior three-month period.

The increase in older people who considered themselves to be retired but were now looking for work was the main cause of the fall.

Sam Beckett, an ONS statistician, said in a statement that the findings "tally with other data that suggest that more people in their 50s are thinking of going back to work, at a time when the cost of living is growing significantly."

The inactivity rate, however, was 1.3 percentage points greater than it was prior to the pandemic.

The BoE is concerned that a smaller pool of available workers will increase the pressure on inflation in the economy.

The number of openings in the three months ending in November was lower than it was a year ago, the first yearly dip since early 2021, another cautionary message from companies that already thought the economy to be in recession.

According to a Reuters poll of economists, the unemployment rate was projected to rise from its previous reading of 3.6% to 3.7%.

(Sources: investing.com, reuters.com)