UK jobs market steadies as vacancies fall further

What's happened

Latest ONS data shows vacancies at 702,000 in August—the lowest since spring 2021—while pay growth remains mixed: private sector at 2.9% and public sector at 6.3%. Unemployment holds at 4.9%, with earnings continuing to outpace inflation. The report signals ongoing softening in the labour market despite stable employment.

What's behind the headline?

The current labour-market snapshot

• Vacancies have declined to 702,000, the lowest in over a decade outside the pandemic period, signaling reduced demand for labour.
• Pay growth remains mixed: private sector wages are lagging inflation while public sector pay has seen stronger gains due to earlier NHS settlements.
• Employee numbers are edging lower, suggesting hiring caution among smaller businesses facing higher costs.

What this means for households

• A cooling job market could ease some inflationary pressures but sustains cost-of-living concerns as wage growth diverges between sectors.
• The Bank of England remains in a wait-and-see stance, with markets pricing in potential rate moves depending on incoming data.

Policy and business implications

• With vacancies down, firms may tighten recruitment, while workers face a shift in bargaining power. Fiscal policy and wage-setting rules will continue to influence the pace of earnings growth across sectors.

How we got here

The ONS data, released ahead of the Bank of England’s rate decision, shows vacancies continuing to decline while payrolled employees edge down across sectors, notably retail and hospitality. Public sector pay has risen sharply due to NHS awards. Economists view this as evidence of a cooling jobs market amid domestic cost pressures and global energy price shifts.

Our analysis

The Mirror reports on the ONS data highlighting private-sector pay at 2.9% and public-sector pay at 6.3%, with unemployment at 4.9%. The Independent and The Guardian corroborate that vacancies are around 702,000 and emphasize broader wage dynamics and Bank of England policy expectations. Direct quotes illustrate analysts’ views on the labour market's trajectory and policy implications.

Go deeper

• What will the Bank of England do next based on today’s numbers?
• How are smaller businesses responding to higher labour costs?
• When will wage growth align more closely with inflation for different sectors?

More on these topics

• Office for National Statistics

  The Office for National Statistics is the executive office of the UK Statistics Authority, a non-ministerial department which reports directly to the UK Parliament.

• United Kingdom - Country in Europe

  The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom or Britain, is a sovereign country located off the north­western coast of the European mainland.

• Great Britain - Island in the United Kingdom

  Great Britain is an island in the North Atlantic Ocean off the northwest coast of continental Europe. With an area of 209,331 km², it is the largest of the British Isles, the largest European island, and the ninth-largest island in the world.

• Bank of England - Bank in London, England

  The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based.

• Middle East - Region

  The Middle East is a transcontinental region that generally includes Western Asia, all of Egypt, Iran, and Turkey. Soviet Central Asia, Afghanistan, and Pakistan are generally excluded.

• RSM UK - Company

  RSM UK is a provider of audit, tax and consulting services to middle market businesses. It is the seventh largest business advisory firm in the United Kingdom and the sixth largest, globally.