EL7.AI
ForexMedium•20 October 2026•
4 min read

UK employment rate rises to 75.3% despite decline in payrolls and vacancies

Key Facts

1Britain's employment rate rose to 75.3% in June–August, up 0.2 percentage points both quarterly and annually.
2The number of payrolled employees fell by 37,000, or 0.1%, in June–August.
3Vacancies fell to 691,000 in July–September, a quarterly decline of 21,000, or 2.9%.
4Annual pay growth including bonuses slowed to 3.7% in June–August from 3.9% in the previous three-month period.
5The Bank of England held interest rates at 3.75% in September in a 6–3 vote.

Britain's employment rate rose to 75.3% in June–August 2026, while the number of payrolled employees fell over the same period, according to Office for National Statistics data released on October 20. The employment rate increased by 0.2 percentage points from the previous quarter, also posting an annual increase of the same size. By contrast, the number of payrolled employees fell by 37,000, or 0.1%, over the quarter corresponding to the Labour Force Survey period. The economic inactivity rate stood at 20.9% in June–August, according to the ONS employment bulletin. The rise in the employment rate coincided with a decline in payrolled employees, as pay growth including bonuses slowed ahead of the Bank of England's next decision.

The preliminary payroll estimate for September showed a monthly increase of 13,000 employees from August, according to the ONS bulletin based on pay and employment information. The increase was 0.04%, a reading covering the change between the two months, compared with the decline recorded over the quarter ending in August. The ONS also revised its estimate of the monthly change in employee numbers in August to an increase of 1,000. The estimate in the previous bulletin had shown a decline of 26,000 employees that month. The revision thus changed August's reading from a decline to an increase, followed by a preliminary rise in September, while the number of payrolled employees remained lower on a quarterly basis in June–August.

On labour demand, the number of vacancies fell to 691,000 in July–September 2026, according to the ONS jobs and vacancies bulletin. Vacancies declined by 21,000 from the previous quarter, a drop of 2.9% over the period. The quarterly decline covered 14 of 18 sectors, extending the fall in vacancies to most sectors covered by the bulletin. In the vacancies survey, smaller businesses reported that rising labour costs could discourage them from hiring, according to the ONS labour market overview. Those businesses' reports on labour costs coincided with the quarterly decline in vacancies, compared with the rise in the employment rate recorded by the Labour Force Survey for the period ending in August.

On wages, annual growth in average pay including bonuses slowed to 3.7% in June–August, compared with 3.9% in the previous three-month period from May to July, according to the ONS. Annual regular pay growth in the public sector was 6.3% in June–August. The private sector recorded growth of 3.0% over the same period, below the public-sector rate. Adjusted for consumer price inflation including owner occupiers' housing costs, real regular pay rose by 0.6% year on year. Real pay growth including bonuses was 0.7%, according to the average weekly earnings bulletin. The continued annual increase in real pay came alongside slower nominal pay growth including bonuses compared with the previous three-month period.

The labour and pay figures follow the Bank of England's September decision to hold interest rates at 3.75%, according to its monetary policy summary and meeting minutes. The Monetary Policy Committee voted 6–3 to hold rates at a meeting that also addressed risks to the inflation outlook. The committee said in its assessment that "the risks to the inflation outlook are skewed to the upside," according to the published text of the September decision. Annual consumer price inflation had risen to 3.1% in August from 2.9% in July, according to the ONS. The increase in consumer price inflation in August coincided with slower pay growth including bonuses in the three-month period ending that month, while the bank held interest rates steady in its subsequent decision.

The ONS will release its September consumer price inflation report on October 21, 2026, according to the official release calendar. The office scheduled publication for 7:00 a.m., according to the release time listed on its website. The September inflation release follows the rise in the annual rate in August and precedes the Bank of England's next monetary policy meeting. The bank's decision is scheduled for November 5, 2026, alongside publication of the Monetary Policy Committee meeting summary and minutes and the November Monetary Policy Report, according to the bank's calendar. The ONS has scheduled the next release of British employment data for November 17, 2026, after the interest rate decision and Monetary Policy Report.