UK Unemployment Falls to 4.7% as Job Vacancies Shrink

Britain's labour market sent mixed signals on 20 October, with unemployment edging lower while hiring demand weakened. Official figures put unemployment at 4.7% in June to August, down 0.1 percentage points from the previous quarter.

Regular earnings in Great Britain rose 3.7% from a year earlier, slightly above the 3.6% increase forecast in a Reuters poll. Private-sector regular pay grew 3.0%. These figures exclude bonuses.

Job vacancies fell by 21,000 to 691,000 in July to September compared with April to June. The Office for National Statistics said smaller firms continued to cite higher labour costs as a reason for holding back recruitment.

A provisional estimate showed payroll employment rising by 13,000 in September, although it remained 66,000 below its level a year earlier. The monthly estimate may be revised as more data arrive.

Reuters reported that the modest improvement in pay growth could strengthen the case for a Bank of England rate increase in November. That is a possible policy response, rather than an announced decision.

The figures leave policymakers weighing persistent wage pressure against weak hiring. The ONS cautioned that survey estimates remain volatile and advised focusing on longer-term movements rather than drawing firm conclusions from short-term changes.

Sources: Reuters via StreetInsider — UK jobs market, 20 October 2026; Office for National Statistics — Labour market overview, October 2026.

Archival photo: Bank of England, London, 2016. Fred Romero / Wikimedia Commons, CC BY 2.0. Cropped to 16:9 by Morval Universal.