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ONS Labour Market July 2026

Payrolls continue to soften

  • Payrolled employees fell by 85,000 (0.3%) between May 2025 and May 2026.
  • Compared with the previous month, payroll numbers were broadly unchanged, increasing by 3,000 (0.0%).
  • Across March to May 2026, payrolled employees declined by 90,000 (0.3%) year-on-year and by 30,000 (0.1%) on the quarter.
  • The early estimate for June 2026 suggests a decrease of 71,000 (0.2%) on the year, while remaining broadly flat on the month (-4,000), leaving total payrolled employees at 30.3 million (provisional and subject to revision).

Employment remains resilient as unemployment eases

  • The UK employment rate for people aged 16-64 was 75.1% in March to May 2026, down 0.1 percentage points on the year but up 0.1 percentage points on the quarter.
  • The unemployment rate stood at 4.9%, up 0.2 percentage points on the year but down 0.1 percentage points on the quarter.
  • Total employment reached a record 34.5 million people. 

Inactivity declines as claimant numbers edge higher

  • The economic inactivity rate (aged 16-64) stood at 20.9%, down 0.1 percentage points on both the year and the quarter.
  • The Claimant Count increased on the month but decreased on the year to 1.689 million in June 2026 (provisional).

Vacancies continue to decline

  • Job vacancies fell by 7,000 (0.9%) on the quarter to 712,000 in April to June 2026.
  • The continued decline suggests employer demand for labour remains subdued.

Pay growth continues to moderate

  • Regular earnings (excluding bonuses) increased by 3.4% year-on-year, while total earnings (including bonuses) rose by 4.3% in March to May 2026.
  • Public sector regular pay growth was 5.5%, compared with 2.9% in the private sector.
  • In real terms:
    • CPIH-adjusted earnings rose by 0.3% for regular pay and 1.1% for total pay.
    • CPI-adjusted earnings increased by 0.4% for regular pay and 1.3% for total pay.

Labour disputes 

  • An estimated 26,000 working days were lost because of labour disputes across the UK in May 2026.

The unemployment rate was up on the year, but was down in the latest quarter

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