UK unemployment at 4.7% as employment rises and payrolls and vacancies fall
Key Facts
Britain's seasonally adjusted unemployment rate stood at 4.7% in June–August 2026, according to the Office for National Statistics, as employment rose while payroll employee numbers and vacancies fell. The October labour market bulletin showed that employment measured by the Labour Force Survey reached 34,577 thousand during the period, up from the previous quarter. The quarterly increase was 102 thousand, with the ONS describing the labour market as "broadly stable during 2026". The rise in survey-based employment coincided with slower annual pay growth including bonuses, while regular pay growth varied between the public and private sectors. The developments come as the Bank of England holds its benchmark interest rate steady and warns of the risk of persistent inflation if energy prices remain high.
Payroll employee numbers fell in June–August compared with the previous quarter, according to the ONS. The decline totalled 37,000 employees, or 0.1% over the three-month period, in contrast to the increase in employment measured by the Labour Force Survey. The provisional estimate for September, however, showed payroll employee numbers returning to growth compared with August. The provisional monthly increase was 13,000 employees, or 0.04%, according to the joint bulletin from the ONS and HM Revenue & Customs. The rise came in the month following the period that recorded a quarterly decline in payroll employees, with the September reading remaining provisional.
On labour demand, vacancies fell to 691,000 in July–September 2026, according to the ONS jobs and vacancies bulletin. The decline from the previous quarter was 21,000 vacancies, or 2.9% over the period. The quarterly fall extended across most of the industries covered by the bulletin, with vacancies declining in 14 of 18 sectors. Responses collected by the Vacancy Survey linked some small businesses' reluctance to hire to higher labour costs, according to the ONS. The contraction in available jobs across multiple sectors thus coincided with the pressures those businesses reported over the cost of employing workers.
On wages, annual growth in average weekly earnings including bonuses slowed to 3.7% in June–August 2026, according to the ONS bulletin. Annual growth had stood at 3.9% in the previous three-month period before easing in the latest reading. Regular pay in the public sector grew by 6.3% annually over the same period, according to the ONS. Private-sector regular pay growth stood at 3.0%, remaining below the pace recorded among public-sector workers. Slower pay growth including bonuses and the divergence in regular pay between the sectors coincided with the declines in payroll employee numbers and vacancies recorded in the labour market bulletins.
On monetary policy, the Bank of England held its benchmark interest rate at 3.75% at the Monetary Policy Committee's latest meeting in September, according to the meeting minutes. The hold was approved by 6 votes to 3, leaving the prevailing rate at the level set by the committee. Annual consumer price inflation had risen to 3.1% in August 2026 from 2.9% in the previous month, according to the ONS. The Bank of England warned in its monetary policy statement that energy prices remaining high increased the risk of persistent inflation. The bank said: "The longer energy prices remain high, the greater the risk that inflation becomes more persistent."
The upcoming release schedule begins with September consumer price inflation data, due on 21 October 2026, according to the official date announced on the British government's website. The announcement set a release time of 7:00 a.m. UK time for the bulletin following the August reading. After the inflation release, the Bank of England's next interest rate decision is due on 5 November 2026, according to the bank's published schedule. That meeting follows September's decision to hold rates steady and the release of new figures on pay, employment and vacancies. The next UK labour market report is scheduled for 17 November 2026, according to the ONS.