Mixed UK Jobs Data
UK Unemployment Holds at 4.9% as Job Market Shows Mixed Signals and Cooling Trends
Anonymous
Key Points
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Data quality caveat: May figures are still based on the Labour Force Survey, with the ONS flagging data quality issues due to the survey transition delaying the data quality improvements.
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Payrolls dipped again in June, dropping by 71,000 (0.2%) so far this year, signaling softer payroll growth even as the unemployment rate remains near 4.9%.
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Real pay growth shows a mixed picture: total pay up about 1.1% year on year in real terms, regular pay up around 0.3% year on year, with earnings ex bonuses at 3.4% and including bonuses at 4.3% in the latest readings.
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Unemployment remained at 4.9% but year-on-year unemployment increased by about 81,000, indicating a deterioration relative to the year-ago period even as the headline rate held firm.
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Vacancies declined by 7,000 in the April–June quarter to an estimated 712,000, with the working-age employment rate at about 75.1% (down slightly year over year but flat quarter on quarter).
The UK unemployment rate held at 4.9% in the three months to May 2026, matching the previous quarter and coming in below the 5.0% forecast, according to Investing.com. The headline figure masked a more complex picture beneath the surface.
Total employment rose by 147,000 in the period, yet payroll jobs fell by about 85,000 year on year, according to ActionForex. The jobs market is cooling — just not collapsing.
Payrolls Keep Falling Even as Jobs Headline Holds
Payroll employment — the count of workers on company payrolls — dropped by 4,000 from May to June, according to ActionForex. That puts payrolls down 0.2% from a year ago. So far in 2026, payroll jobs are down 71,000, or 0.2% for the year.
The gap between rising total employment and falling payrolls points to a shift in how people work. More people may be self-employed or in informal roles. Around 1.28 million people now hold a second job, adding to the picture of an uneven labor market.
Wage Growth Offers Only Partial Relief for Workers
Average weekly earnings excluding bonuses rose 3.4% year on year, according to Investing.com. Including bonuses, pay grew 4.3% — down from the prior reading, ActionForex reported. That sounds solid, but inflation erodes much of those gains.
In real terms — after accounting for price rises — total pay grew just 1.1% year on year. Regular pay grew only 0.3% in real terms. Workers are technically earning more, but their purchasing power has barely moved.
Vacancies Shrink as Year-on-Year Unemployment Climbs
Job vacancies fell by 7,000 in the April–June quarter to an estimated 712,000, according to WSJ. That continuing drop signals employers are pulling back on hiring. The working-age employment rate sits at 75.1%, down slightly from a year ago.
Year on year, unemployment rose by about 81,000 people, according to Market Screener. The headline rate of 4.9% looks stable, but that rise in total unemployed people tells a different story about the direction of travel.
Data Caveats Leave Policymakers in a Difficult Spot
The Office for National Statistics flagged ongoing data quality issues with the figures, according to Investing.com. The numbers still rely on the Labour Force Survey, and a planned upgrade to improve data quality has been delayed. That makes it harder to read the true state of the labor market.
The Bank of England watches wage growth closely when setting interest rates. With pay at 4.3% including bonuses and payrolls weakening, the signals are mixed. WSJ noted that wage dynamics are already moving currency markets, showing how much weight traders place on this data.
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