The UK jobs market continues to show signs of weakness, with pay growth slowing and unemployment edging higher ahead of the autumn budget next month.

The latest data from the Office for National Statistics (ONS), released on Tuesday, showed that annual wage growth excluding bonuses in the three months to August was 4.7%, down slightly from 4.8% between May and July.

The unemployment rate came in at 4.8% for the period, slightly higher than the 4.7% recorded for the previous three months.

The number of employees on the payroll in the year to August was estimated to have fallen by 93,000, though it increased by 10,000 between July and August.

Early estimates for the number of payrolled employees in September suggested a fall of 100,000 on the year and 10,000 on a monthly basis, though the ONS said this was likely to be revised when more data is received next month.

The estimated number of job vacancies fell by 9,000 from the previous three months to 717,000 in July to September.

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Liz McKeown, director of economic statistics at the ONS, said: “After a long period of weak hiring activity, there are signs that the falls we have seen in both payroll numbers and vacancies are now levelling off.

“We see different patterns across the age ranges with record numbers of over 65s in work, while the increase in unemployment was driven mostly by younger people.”

The figures come ahead of the government’s autumn budget, which chancellor Rachel Reeves is due to deliver on 26 November, with speculation ramping up as to what policy changes she could announce to raise funds to support public finances.

Professor Joe Nellis, an economic adviser at accountancy and advisory firm MHA, said that the labour market “continues to show signs of strain”.

“Hiring momentum has slowed across most sectors, with many employers holding off on new recruitment or scaling back hours instead of making redundancies,” he said. “While this suggests a degree of resilience, it also signals that businesses are operating with caution amid fragile demand, elevated borrowing costs, and uncertainty ahead of the autumn budget.”

Nellis said this is having a particular impact on the employment prospects of young people entering the workforce for the first time.

“The debate around AI rages on, and while some businesses are claiming that their entry-level recruitment is slowing as AI proves able to complete the more menial tasks that are often the responsibility of these employees, the more important driver of this is hiring costs,” he said. “The increase in the minimum wage and employer NICs [national insurance contributions] have made it difficult for businesses to invest in young talent, and we are seeing this reflected in the high levels of youth unemployment.”