UK labour market weakens as payrolls and vacancies fall, unemployment holds at 4.9%

  • UK payrolled employment fell 26,000 to 30.2 million in August, while vacancies declined to 702,000.
  • Unemployment held at 4.9% and regular pay excluding bonuses grew 3.5% year-on-year to £705 a week.
  • Employment reached 34.478 million in the three months to July, while the FTSE 100 fell more than 0.5% ahead of the Bank of England decision.

UK labour-market data showed continued weakness ahead of the Bank of England's interest-rate decision. Payrolled employment fell by 26,000, or 0.1%, to 30.2 million in August 2026, following a revised 19,000 decline in July and exceeding economists' expectation for a 5,000 reduction. Vacancies fell to 702,000 in the three months to August, their lowest level since the three months to April 2021. Unemployment held at 4.9% in the three months to July, while regular pay excluding bonuses rose 3.5% year-on-year to £705 a week. Employment nevertheless increased by 67,000 to 34.478 million in the three months to July, although the earlier release reported a 66,000 increase for the same period. The data weighed on UK markets, with the FTSE 100 down more than 0.5% as oil prices rose and banks and miners declined. The figures leave the Bank of England balancing labour-market weakness against persistent wage and inflation pressures, including the possible effect of higher energy prices linked to the Iran war.

The information on this website is generated using AI and we cannot guarantee its accuracy. Please use it as reference information only.