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GB: Labour Market Report
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Claimant Count - M/M | 6.7 | 31.2 | 1.3 | ||
| Claimant Count Unemployment Rate | 4.4% | 4.5% | 4.4% | ||
| ILO Unemployment Rate | 5.0% | 4.9% to 5.0% | 4.9% | 4.9% | |
| Average Earnings - Y/Y | 4.3% | 4.4% |
Highlights
The latest UK labour market data point to a gradual easing in employment conditions, with signs of resilience tempered by slowing labour demand. Payrolled employment declined by 85,000 year-over-year in May 2026 and the provisional June estimate indicates a further annual reduction of 71,000, although monthly employment remained broadly stable. This suggests that employers are becoming more cautious about workforce expansion rather than engaging in widespread job shedding.
The labour market continues to rebalance. While the employment rate edged up to 75.1 percent over the quarter, unemployment eased slightly to 4.9 percent, and economic inactivity fell to 20.9 percent, indicating that labour market participation is gradually improving despite softer hiring conditions. However, vacancies declined to 712,000, signalling weaker recruitment demand and a moderation in business confidence.
Wage growth remains positive but is losing momentum. Regular earnings increased by 3.4 percent annually, while real regular pay grew by only 0.3 percent, implying that inflation continues to constrain household purchasing power. Stronger public sector pay growth (5.5 percent) compared with the private sector (2.9 percent) reflects ongoing public pay settlements rather than broad-based wage acceleration. In summary, the data suggest a labour market transitioning from post-pandemic tightness towards greater equilibrium, reducing immediate inflationary pressures while raising concerns over the pace of future economic growth.
Market Consensus Before Announcement
The jobless rate is seen up at 5.0 percent in July versus 4.9 percent in June.
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 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.