UK unemployment rate steady in August, vacancies continue to fall

15th Sep 2026 07:52

(Sharecast News) - The UK unemployment rate was steady in August, while vacancies continued to fall, according to data released on Tuesday by the Office for National Statistics.

The unemployment rate remained at 4.9% in the three months to July, versus expectations for an uptick to 5%. Meanwhile, the number of payrolled employees fell by 26,000 between July and August and by 145,000 on the year, to 30.2m.

Total pay growth including bonuses eased to 3.9% in May to July from 4.2% in the previous three months, while regular pay excluding bonuses was unchanged at 3.5%.

Annual average regular earnings growth was 6.3% for the public sector and 2.9% for the private sector.

The figures also showed that the number of vacancies in June to August 2026 fell by 8,000 to 702,000, compared with March to May.

Liz McKeown, director of economic statistics at the ONS, said: "The labour market remains broadly stable, with employment and unemployment rates largely unchanged in the latest period. However, payrolled employee numbers continue to edge down, with falls over the past year particularly evident in the retail and hospitality sectors.

"Regular wage growth has remained relatively stable in recent months, while total pay growth, which includes bonuses, has eased and was last lower nearly six years ago. There remains a notable difference between public and private sector pay growth, with public sector figures continuing to be affected by the timing of NHS pay awards this year."

McKeown said vacancies remain at their lowest level outside the pandemic period for more than a decade, with smaller businesses continuing to report that increased labour costs are affecting hiring decisions.

Jake Finney, senior economist at PwC UK, said: "The latest figures point to continued softness in the jobs market, with little evidence of a meaningful improvement. Outside the public sector, there is not much in the way of jobs growth. If anything, job losses appear to be accelerating in consumer-facing sectors, where payrolled employment has now been falling for around two years.

"This presents a dilemma for the Bank of England. With the jobs market remaining weak, it is difficult to see the case for raising interest rates. But the external backdrop is deteriorating again. Oil prices are now above $100 a barrel, close to the most adverse of the three scenarios the Bank outlined in July, raising the risk of renewed inflation pressures.

"Faced with these mixed signals, the Bank may prefer to hold rates steady until there is clearer evidence that higher energy prices are feeding through into broader inflation."