Claimant counts increased by 27.9k in September after rising by just 0.3k in August.

August's UK wage growth figures suggest a softer inflation outlook. Slower wage growth may reduce disposable income, possibly curbing consumer spending and easing inflationary pressures.

However, trends in the UK unemployment rate could be a focal point. The unemployment rate was down from 4.4% in May 2024 to 4.0% in August 2024, signaling a tightening labor market. Tighter labor market conditions could support wage growth, potentially fueling consumer spending and demand-driven inflation.

Inflation remains a key concern for the Bank of England. This month, Governor Andrew Bailey indicated that if inflation remains low, the Bank may adopt a more dovish policy by cutting rates more aggressively. However, the BoE could take a more cautious stance on monetary policy with a lower unemployment rate of 4.0%.

Wednesday's inflation figures for September will be crucial to the BoE's policy stance and investors' expectations of November and December rate cuts.

Economists expect the UK inflation rate to fall from 2.2% in August to 1.9% in September. A softer-than-expected print, alongside weaker wage growth, may ease concerns about the unemployment rate. Such a scenario could fuel speculation about multiple Q4 2024 BoE rate cuts.

Investors should track any BoE insights into the latest labor market data.