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GB: Labour Market Report
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Claimant Count - M/M | 17.4 | -6.2 | -33.3 | ||
| Claimant Count Unemployment Rate | 4.3% | 4.4% | 4.3% | ||
| ILO Unemployment Rate | 4.7% | 4.7% to 4.7% | 4.7% | 4.7% | |
| Average Earnings - Y/Y | 4.6% | 4.5% to 4.7% | 4.7% | 4.6% |
Highlights
The latest UK labour market figures showed that payrolled employees fell by 0.5 per cent (142,000) year-over-year in July 2025, with further declines recorded in August, signalling continued pressure on job creation despite modest gains in the employment rate, which stood at 75.2 percent for people aged 16 to 64 years. Unemployment rose to 4.7 percent, while inactivity fell to 21.1 percent, suggesting more people are actively seeking work but finding fewer opportunities, as reflected in the 38th consecutive quarterly fall in vacancies. Workforce jobs dipped slightly, though public sector employment continued to expand, underlining the stabilising role of government hiring.
Earnings growth remained solid, with regular earnings rising 4.8 percent annually and total earnings rising to 4.7 percent annually, stronger in the public sector (5.6 percent) than private (4.7 percent). After adjusting for inflation, regular pay growth was modest at 0.7 percent using CPIH, while total pay was 0.5 percent, though higher at 1.2 percent for regular pay and 1.0 percent for total pay under CPI, indicating slight improvements in purchasing power. However, the persistence of strikes, particularly in health and social work, with 83,000 days lost in July, underscores industrial tensions.
Overall, the labour market shows signs of structural adjustment. Falling vacancies and job numbers contrast with higher participation and earnings, pointing to a market under strain but not without areas of resilience. These latest numbers take the RPI to 8 and the RPI-P to 1, meaning that economic activities are now within the expectations of the UK economy.
Market Consensus Before Announcement
The ILO jobless rate is seen flat at 4.7 percent in August versus 4.7 percent in July. Average earnings including bonus are also expected unchanged with an increase of 4.6 percent on year versus 4.6 percent in July.
Definition
The Labour Market Report covers a number of key areas of the jobs market. Unemployment is updated on the basis of two separate surveys: the claimant count, which measures the number of people claiming unemployment-related benefits, and the more reliable but lagging International Labour Organization's (ILO) measure that excludes jobseekers that did any work during the month and covers those people who are both looking and are available for work. Average earnings growth, a key determinant of inflation, is also updated.
Description
The labour market survey gives the most comprehensive report on how many people are looking for jobs, how many have them and what they are getting paid and how many hours they are working. These numbers are the best way to gauge the current state as well as the future direction of the economy.
The survey also provides information on wage trends, and wage inflation is high on the Bank of England's list of enemies. Bank officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Bank to maintain a more accommodative monetary policy. If inflation is a problem, the Bank is limited in providing economic stimulus - it must stay within range of its mandated inflation target.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it is a reasonable bet that interest rates will have to rise and bond and stock prices will fall. In contrast, when jobs growth is slow or negative, then interest rates are more likely to decline - boosting bond and stock prices in the process.