UK Unemployment Rate Dips Amidst Shifting Labour Market
Job vacancies fall to five-year low as smaller firms cite rising labour costs.
Callum Smith
The UK unemployment rate for people aged 16 and over stood at 4.7 per cent from June to August 2026.
Payrolled employees increased to 30.3 million between August and September. David Freeman noted that while the labor market remains broadly flat in 2026, the latest data shows the employment rate edging up and a small drop in unemployment.
Average wage growth, including bonuses, fell to 3.7 percent from 3.9 percent. However, average regular earnings growth was 0.8 percent higher after accounting for Consumer Prices Index inflation, the Office for National Statistics confirmed.
The number of unemployed people fell by 47,000 in the quarter, reaching 1.712 million. Vacancies in the UK dropped by 21,000 to 691,000 in the three months to September, hitting their lowest level in over five years.
The number of vacancies saw its largest fall since the start of the year, concentrated mainly within smaller businesses.
Firms continue to cut vacancies, primarily smaller businesses. These businesses cite increased labor costs as a key factor.
David Freeman stated that the number of vacancies saw its largest fall since the start of the year, concentrated mainly within smaller businesses.
Companies claim energy costs rose since the Iran war began, alongside increases in National Insurance and the minimum wage. This makes employing staff more expensive.
Vacancy estimates decreased in 14 of the 18 industry sectors. Construction saw the largest decrease, down 7,000 vacancies.
The number of workers on payroll remains slightly down over the same period. Data for the most recent month suggests that might be starting to level off, David Freeman confirmed.
The next UK Budget is scheduled for October 28.