UK Unemployment Rate Unexpectedly Declines Amid Stable Regular Wage Growth

05:45 AM EDT, 10/20/2026 (MT Newswires) -- The UK's jobless rate unexpectedly declined in the three months to August amid a drop in job vacancies and "relatively stable" regular wage growth, data from the Office for National Statistics showed Tuesday. The unemployment rate for people aged 16 years and over stood at 4.7% in the three months to August, down from 4.9% in the prior three-month period and below the consensus estimate of 4.9%. Meanwhile, the employment rate for people aged 16 to 64 years was 75.3% during the quarter to August. "While the labour market remains broadly flat in 2026, data from the latest quarter shows the employment rate edging up and a small drop in unemployment. The number of workers on payroll remains slightly down over the same period, though data for the most recent month suggests that might be starting to level off," ONS Deputy Director of Labour Market Statistics David Freeman said. "The number of vacancies has seen its largest fall since the start of the year, concentrated mainly within smaller businesses, which cite increased labour costs as a key factor." The estimated number of job vacancies in the UK dropped by 21,000 to 691,000 in the July to September period. Employees' average regular earnings growth, excluding bonuses, came in at 3.7% year over year in the three months to August, remaining relatively stable for the sixth straight three-month period. On the other hand, growth in total earnings, including bonuses, declined to 3.7% from 3.9%, marking its lowest rate in nearly six years. In the public sector, the annual average growth in regular pay stood at 6.3%, unchanged from the previous three-month period, while regular earnings growth in the private sector edged up to 3% from 2.9%. "After a torrid couple of years for UK employment, there are growing signs that the worst is behind us and that hiring is starting to stabilise. But that is not the same thing as a jobs market that is heating up," ING said in a quick take note. "So when the Bank of England hikes rates in November, as looks increasingly likely, it won't be because of anything in the economic data. We still have inflation data tomorrow, but so far, there's scant evidence that the energy shock is broadening out via second-round effects." "Instead, a November hike - together with the follow-up move we tentatively expect in February - will be entirely an insurance move. That means that, assuming we don't get big second-round effects emerging over the winter, the Bank should be in a position to start cutting rates again from late 2027, when the storm has passed."