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From 17m ago Introduction: UK unemployment rate falls in pre-budget boost Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The UK unemployment rate has fallen, in a pre-budget boost to chancellor John Healey, but firms are continuing to cut vacancies. The latest data on the UK labour market, just released, shows that the UK unemployment rate fell to 4.7% in June to August, down from 4.9% a month ago.
That’s better than expected – City economists had forecast a rise to 5%. In its final snapshot of Britain’s jobs market ahead of the budget in two week’s time, the Office for National Statistics reports that employment rose, by 102,000 jobs, to 34,577m in the last quarter. The number of people unemployed fell by 47,000 in the quarter to 1.712m, and there was a small (16,000) drop in the number of people ‘economically inactive’, to 9.091m.
But worryingly, the number of vacancies has seen its largest fall since the start of the year, falling by 21,000 in the last quarter. That pulled the number of vacancies down to 691,000 in July to September, down from over 1.2m in early 2022. This is the first time the total has been below 700,000 since February to April 2021.
The ONS says: double quotation mark This is mainly from smaller firms, who continue to suggest that they may not be recruiting because of increased labour costs. That’s a reference to the higher employer National Insurance Contributions (NICs) brought in by Healey’s predecessor, Rachel Reeves, and the rise in the minimum wage, which have made it costlier to hire staff. More to follow....
The agenda 7am BST: UK labour market data 10am BST: ZEW index of eurozone economic sentiment 10am BST: Eurozone construction output for August 2.30pm BST: BIST Committee questions Secretary of State Jonathan Reynolds Key events 4m ago Public sector pay outpaces private sector, but.... 7m ago Real wage growth remains weak 11m ago A mixed picture on wage growth 14m ago Construction led fall in vacancies 17m ago Introduction: UK unemployment rate falls in pre-budget boost Here’s ONS deputy director of labour market statistics, David Freeman, on today’s jobs data: double quotation mark “While the labour market remains broadly flat in 2026, data from the latest quarter shows the employment rate edging up and a small drop in unemployment. The number of workers on payroll remains slightly down over the same period, though data for the most recent month suggests that might be starting to level off. “The number of vacancies has seen its largest fall since the start of the year, concentrated mainly within smaller businesses, which cite increased labour costs as a key factor.
“Regular wage growth remained relatively stable, though total pay – including bonuses – has eased to its lowest rate in nearly six years.” Public sector pay outpaces private sector, but.... Pay continued to rise faster in the public sector than in the private sector, today’s labour market report shows. Regular annual growth was 3.0% for the private sector and 6.3% for the public sector.
But as the ONS points out, public sector pay growth continues to be affected by variations in the timings of pay awards this year – largely to do with pay deals in the NHS. Photograph: ONS Real wage growth remains weak Once you account for inflation, UK real wage growth remained below 1% last month. Annual real regular pay growth was broadly unchanged at 0.8% in June to August, the ONS reports, based on the CPI inflation measure.
Annual real total pay growth (using CPI) was 0.9% in June to August 2026, a slight decrease. A mixed picture on wage growth Regular pay growth rose in the last quarter, today’s labour market report shows. But once you account for bonuses, wage growth slowed.
The ONS reports that regulator pay grew by 3.7% in the June-August quarter, up from 3.6% a month ago. But growth in total pay (including bonuses) was 3.7% in June to August 2026, down from 3.9% in May-July. Construction led fall in vacancies Vacancies fell particularly sharply across the construction sector, suggesting Britain’s builders cut back on hiring last summer.
The ONS reports: Vacancy estimates decreased on the quarter, with early estimates for July to September 2026 suggesting a decrease of 21,000 (2.9%) vacancies to 691,000, compared with April to June 2026; this is the first time the total has been below 700,000 since February to April 2021. Vacancy estimates decreased in 14 of the 18 industry sectors, compared with April to June 2026; the largest industry decrease was in construction (down 7,000 vacancies). Vacancy estimates decreased in 4 of the 5 employment size bands, compared with April to June 2026; the largest decrease was for businesses with 1 to 9 employees (down 21,000 vacancies).
Introduction: UK unemployment rate falls in pre-budget boost Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The UK unemployment rate has fallen, in a pre-budget boost to chancellor John Healey, but firms are continuing to cut vacancies. The latest data on the UK labour market, just released, shows that the UK unemployment rate fell to 4.7% in June to August, down from 4.9% a month ago.
That’s better than expected – City economists had forecast a rise to 5%. In its final snapshot of Britain’s jobs market ahead of the budget in two week’s time, the Office for National Statistics reports that employment rose, by 102,000 jobs, to 34,577m in the last quarter. The number of people unemployed fell by 47,000 in the quarter to 1.712m, and there was a small (16,000) drop in the number of people ‘economically inactive’, to 9.091m.
But worryingly, the number of vacancies has seen its largest fall since the start of the year, falling by 21,000 in the last quarter. That pulled the number of vacancies down to 691,000 in July to September, down from over 1.2m in early 2022. This is the first time the total has been below 700,000 since February to April 2021.
The ONS says: double quotation mark This is mainly from smaller firms, who continue to suggest that they may not be recruiting because of increased labour costs. That’s a reference to the higher employer National Insurance Contributions (NICs) brought in by Healey’s predecessor, Rachel Reeves, and the rise in the minimum wage, which have made it costlier to hire staff. More to follow....
The agenda 7am BST: UK labour market data 10am BST: ZEW index of eurozone economic sentiment 10am BST: Eurozone construction output for August 2.30pm BST: BIST Committee questions Secretary of State Jonathan Reynolds
Source: The Guardian
