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GB: Labour Market Report
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Claimant Count - M/M | 28.6 | 17.9 | 2.7 | ||
| Claimant Count Unemployment Rate | 4.4% | 4.4% | 4.3% | ||
| ILO Unemployment Rate | 5.1% | 5.1% to 5.2% | 5.2% | 5.1% | |
| Average Earnings - Y/Y | 4.2% | 4.7% | 4.6% |
Highlights
The UK labour market data showed that payrolled employment fell 0.4 percent year-over-year to 30.3 million by January 2026, signalling gradual workforce contraction, while the quarterly decline reinforces a persistent softening trend. Yet this easing is nuanced as the employment rate held steady at 75.0 percent annually, suggesting labour demand remains structurally intact even as short-term hiring slows.
Rising unemployment (5.2 percent) alongside falling economic inactivity (20.8 percent) indicates more people are re-entering the labour force, but not all are finding jobs immediately, often a sign of transitional labour market adjustment rather than recessionary stress. Vacancies edging up to 726,000 support this interpretation, pointing to selective hiring rather than broad contraction.
Wage dynamics showed that nominal earnings growth of 4.2 percent for both total and regular pay, while in real terms, growth was 0.5 percent for both regular and total pay, implying inflation still erodes purchasing power. Stronger public-sector pay growth (7.2%) largely reflects timing effects from earlier settlements, not a structural wage surge.
Overall, the labour market appears to be rebalancing as employment is softening, participation improving, vacancies stabilising, and real wage growth is modest, which are characteristics of a cooling but resilient system rather than one in distress. These latest updates take the RPI to 12 and the RPI-P to 12, meaning that economic activities continue to outpace market expectations in the UK.
Market Consensus Before Announcement
ILO unemployment is seen flat at 5.1 percent in February from January.
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.