UK Unemployment Falls to 4.7% but Vacancies Hit a Five-Year Low
The jobless rate dropped to 4.7 percent in the three months to August, beating forecasts. Vacancies fell to 691,000, total pay growth slowed to its lowest in nearly six years, and inflation data lands Wednesday.
Key points
- Britain's unemployment rate fell to 4.7 percent in the three months to August, the Office for National Statistics said on Tuesday, October 20.
- The headline improved, but the hiring picture stayed weak.
- Unemployment: 4.7 percent in the three months to August, down from 4.9 percent.
Britain's unemployment rate fell to 4.7 percent in the three months to August, the Office for National Statistics said on Tuesday, October 20. The rate dropped from 4.9 percent in the three months to July. Forecasters had expected it to stay at 4.9 percent. It is now the lowest rate since the three months to July 2025.
The headline improved, but the hiring picture stayed weak. Job vacancies fell again, pay growth slowed, and the number of payrolled employees was lower than a year ago. The figures point to a labour market that is holding up on jobs, yet offering fewer openings for people looking to move.
Key numbers
Unemployment: 4.7 percent in the three months to August, down from 4.9 percent.
Vacancies: 691,000 in the three months to September, down 21,000 on the quarter. That is a fresh five-year low and the biggest quarterly fall since the start of the year.
Payrolled employees: down 111,000 on the year in August, but up 1,000 on the month after revision. The early estimate for September showed a fall of 66,000 on the year and a rise of 13,000 on the month. The ONS stressed that the early September figures are provisional and may change.
Total pay growth: 3.7 percent, down from 3.9 percent, below the 3.8 percent forecast. It is the lowest total pay growth in nearly six years.
Regular pay growth: 3.7 percent, up from 3.6 percent. After inflation measured by the Consumer Prices Index, regular pay rose 0.8 percent in real terms, according to PA Media reporting of the ONS release.
Pay growth cools in the private sector
Private sector total pay growth eased to 3.1 percent, from 3.3 percent. The Bank of England tracks that figure closely, since it helps judge whether wage pressure will feed into prices. A slower pace gives the Bank more room, but it does not settle the rate debate on its own.
Total pay, which includes bonuses, slowed more than regular pay. That gap matters for households. Bonuses helped lift earnings in earlier periods. As that support fades, real income gains depend more on basic pay and on inflation falling.
ONS deputy director David Freeman said the labour market remains "broadly flat" in 2026. He said the employment rate is edging up, regular wage growth is relatively stable, and total pay growth now sits at its lowest in nearly six years. That summary matches the mixed data: a lower jobless rate, but fewer vacancies and a smaller payroll than last year.
What happens next
Inflation data comes next. UK Consumer Prices Index inflation for September will be published on Wednesday, October 21, at 0700 BST. Forecasters expect 3.4 percent, up from 3.1 percent in August, according to Alliance News. A higher print would limit hopes of a fast rate cut. A lower print would shift the focus back to weak hiring.
The government budget is scheduled for October 28. Employers and job seekers will watch for tax and spending choices that affect hiring costs. For now, the ONS picture is clear: Britain is not shedding jobs at pace, but firms are posting far fewer roles than they did five years ago, and pay growth is cooling.