The UK government has published its latest official labour market data, offering a detailed picture of employment, unemployment, vacancies and wage growth as the economy moves through 2026.
Released by the Office for National Statistics (ONS), the figures provide important insight into the health of the British labour market and reveal a mixed picture: employment remains relatively resilient, but payroll numbers are declining while wages continue to increase.
The latest data show that the number of payrolled employees stood at approximately 30.3 million in July 2026. This represented a decline of 94,000, or 0.3%, compared with July 2025. On a monthly basis, payroll employment fell by 13,000, although the ONS described the change as broadly unchanged.
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Importantly, July’s figure is an early estimate and could be revised as more administrative data become available. The broader Labour Force Survey paints a similarly cautious picture.
The employment rate for people aged 16 to 64 was estimated at 75.1% between April and June 2026, down 0.2 percentage points from a year earlier but slightly higher than the previous quarter.
Meanwhile, the unemployment rate for people aged 16 and over stood at 4.9%, 0.2 percentage points higher than a year earlier. Economic inactivity remained at 20.9%, suggesting that the proportion of working-age people outside the labour force has not changed significantly.
Wage growth, remains comparatively strong. ONS data show that average employee earnings increased by 3.5% annually for regular pay between April and June, while total earnings, including bonuses, rose by 4.1%.
In real terms, after adjusting for CPIH inflation, regular pay increased by 0.5%, while total pay rose by 1.1%. This indicates that workers are still experiencing modest gains in purchasing power despite continuing cost pressures.
The distribution of wage growth is significant. Public-sector regular earnings increased by 6.1% annually, compared with 2.8% in the private sector. The ONS cautioned that public-sector wage growth is influenced by the timing of pay settlements, meaning the gap should not necessarily be interpreted as a permanent structural difference between the two sectors.
Pay As You Earn data provide another important measure of household income. Median monthly pay reached £2,642 in July, representing annual growth of 4.2%. Health and social work recorded the strongest median pay growth among highlighted sectors at 5.3%, while education recorded the weakest at 3.3%.
At the same time, the number of vacancies has softened. Early estimates for May to July showed vacancies falling by 6,000 to 707,000. The ONS noted that some smaller businesses may be reducing recruitment because of higher labour and operating costs. This suggests employers remain cautious even as wage pressures persist.
Overall, the latest figures point to a UK labour market entering a more delicate phase. Wage growth remains positive, but employment expansion has weakened and vacancies have declined. For policymakers, the challenge is balancing wage growth and household purchasing power against the risk that elevated labour costs could discourage hiring.
The data therefore provide neither a picture of a collapsing labour market nor one of accelerating strength. Instead, they suggest gradual cooling, with wages continuing to rise while employment momentum loses some strength.
For businesses, workers and policymakers, that balance will remain crucial in determining the direction of the UK economy through the remainder of 2026.