British unemployment fell more than expected to 4.7% in the three months to August. Job vacancies dropped to their lowest since 2014 outside the pandemic, and total pay growth cooled, sending mixed signals to the Bank of England.
British unemployment fell to 4.7% in the three months to August, beating a forecast of 4.9%. The Office for National Statistics (ONS) said the rate was down 0.1 percentage point on both the year and the quarter, with 1.712 million people unemployed.
The employment rate for people aged 16 to 64 rose to 75.3%, up 0.2 percentage points on both the year and the quarter. The economic inactivity rate fell to 20.9%.
Vacancies fall to 691,000
Vacancies fell by 21,000, or 2.9%, to 691,000 in July-September from April-June, and survey feedback suggests smaller firms may not be recruiting because of increased labour costs.
It was the largest quarterly fall since January-March 2026, which was also a drop of 21,000. Outside the COVID-19 pandemic, vacancies were last at or below 691,000 in July-September 2014, when there were 686,000.
Pay growth slows to 3.7%
Total pay growth, including bonuses, slowed to 3.7% in June-August from 3.9% in the previous three-month period. That was the lowest since August-October 2020, when it was 2.8%.
Regular pay growth, excluding bonuses, was also 3.7%. After inflation, regular pay rose 0.6% and total pay 0.7% using the CPIH measure, which includes owner occupiers' housing costs.
Payrolled employees fall 0.4% on the year
HM Revenue and Customs data showed the number of payrolled employees fell by 111,000, or 0.4%, between August 2025 and August 2026, but rose by 1,000 between July and August. The September estimate is provisional and likely to be revised.
The ONS said the labour market remains broadly flat in 2026 and advised focusing on long-term movements in the data, which can be volatile.
Source: Investing.com
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