Britain's labor market cooled further in the second quarter, with private-sector regular pay growth easing to 2.8% year on year in the three months to June, its weakest pace since the three months to October 2020, while job vacancies fell to 707,000 in the three months to July, the lowest since the pandemic. The unemployment rate held at 4.9%, above expectations for a dip to 4.8%, and PAYE employment fell by 13,000 in July after an equally sized revised decline in June, leaving employment 0.3% below a year earlier. Overall regular wage growth across the economy was 3.5%, slightly above the 3.4% consensus forecast, but that masked a split between public-sector pay, which accelerated to 6.1% from 5.5%, and private-sector pay, which slowed from 2.9% to 2.8%. Average earnings including bonuses eased to 4.1% in June from a revised 4.4% in May. The Office for National Statistics said smaller firms were pulling back on hiring because of labor and operating costs, and ONS director of economic statistics Liz McKeown said, "The labour market picture is little changed overall, with some softening still evident." The figures matter for the Bank of England, which closely tracks private-sector wages as a signal of domestic inflation pressure while assessing whether the energy price shock linked to the Iran conflict could feed longer-term inflation. Financial markets on Monday were pricing in one quarter-point rate increase by the end of 2026 from the current 3.75% benchmark rate, while Capital Economics said weakening labor conditions reduce the risk of second-round inflation effects and support leaving rates unchanged. A separate Chartered Institute of Personnel and Development survey also pointed to a subdued backdrop, describing conditions as a "low-hire, low-fire" labor market.