Rates cut back in the works as jobless figure spikes

A shock jump in Australia's unemployment rate has increased pressure on the Reserve Bank to cut interest rates at its next meeting.

Labour force figures showed unemployment rising from 4.2 per cent to 4.5 per cent in September, according to the Australian Bureau of Statistics.

The higher jobless rate meant homeowners could get a mortgage reprieve soon, NAB senior markets economist Taylor Nugent said.

"Today's outcome clearly makes a November cut a higher probability than would have been the case had today's number been near our and consensus expectations,'' he said.

"We continue to expect a hold as the RBA awaits more clarity on the outlook given the inherent month-to-month volatility."

The result defied market predictions with economists tipping the jobless rate to remain steady.

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