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GB: Labour Market Report
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Claimant Count - M/M | 26.5 | 26.8 | 4.9 | ||
| Claimant Count Unemployment Rate | 4.4% | 4.4% | |||
| ILO Unemployment Rate | 4.9% | 4.8% to 5.15% | 5.0% | 4.9% | |
| Average Earnings - Y/Y | 3.7% | 3.6% to 3.8% | 4.1% | 3.8% | 3.9% |
Highlights
The latest UK labour market data point to a gradual cooling of employment conditions amid persistent structural fragilities in the economy. Payroll employment continued to weaken, with annual declines in payrolled employees and a further softening in provisional April 2026 figures, suggesting that businesses remain cautious in expanding labour demand in the face of subdued economic confidence and elevated operating costs.
Although the employment rate remained relatively stable at 75.0 percent, the rise in unemployment to 5.0 percent over the year reflects growing labour market slack, while the decline in vacancies to their lowest level since 2021 reinforces evidence of moderating hiring activity. At the same time, wage growth continues to outpace inflation modestly, particularly in the public sector, indicating some resilience in household earnings and purchasing power.
However, real pay growth remains weak, implying that many households are still experiencing constrained living standards despite easing inflationary pressures. The fall in economic inactivity compared with the previous year may indicate gradual labour market re-engagement, yet continued volatility in labour force survey estimates and reliance on provisional administrative data warrant caution in interpreting short-term movements.
Indeed, the latest report presents a labour market transitioning from post-pandemic tightness towards a more subdued and fragile equilibrium. This update takes the RPI to 63 and the RPI-P to 69, meaning that economic activities continue to outpace market expectations in the UK.
Market Consensus Before Announcement
The jobless rate is expected unchanged at 4.9 percent and earnings growth at 3.7 percent versus 3.8 percent in April.
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.