UK jobs market steadies as vacancies stay low

What's happened

A run of fresh data shows the UK labour market remains resilient despite signs of cooling. Payrolls edge down; unemployment holds at 4.9%; wage growth remains mixed across private and public sectors, with vacancies at a post-pandemic low.

What's behind the headline?

The story so far

• The labour market has been cooling gradually as vacancies drop and hiring slows, particularly in retail and hospitality.
• Public-sector pay dynamics are diverging from the private sector due to earlier NHS awards and sector-specific pressures.
• The Bank of England faces a backdrop of higher energy costs and global inflation risks that could influence future rate decisions.

What to watch next

• Whether the dip in payrolls translates into higher unemployment or a re-acceleration in job creation.
• If wage growth stabilises or accelerates as inflationary pressures persist.
• How policymakers respond to a labour market that remains resilient but shows signs of softening.

How we got here

The latest ONS, HMRC and independent data show a stubborn labour market: vacancies have fallen to around 702,000, payroll figures are softening while unemployment remains steady. Analysts note wage growth in the private sector remains below or near inflation, while public sector pay has seen stronger growth due to earlier awards.

Our analysis

According to the Guardian and Independent, the ONS shows vacancies at multi-year lows with unemployment steady; BBC Business notes wage growth easing; HMRC data suggests payrolls are stable with public-sector pay higher due to earlier awards. CNBC provides a US perspective on inflation-wage dynamics for context.

Go deeper

• Will vacancies continue to fall through autumn, and what would that mean for wage growth?
• How will the Bank of England respond if inflation stays sticky but payrolls weaken?
• Should workers expect more hiring in health and public services as other sectors slow?

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