Key facts
- Private sector regular earnings growth in the UK slowed to 2.8% in the three months to June, the weakest since October 2020.
- Job vacancies declined to 707,000 in the three months to July, the lowest level since April 2021 (excluding the pandemic period, lowest since late 2014).
- The unemployment rate remained at 4.9% for the three months to June.
- Overall employment growth in Q2 was 83,000, below economists' median forecast.
- The number of payrolled employees decreased for the sixth month in a row in July.
Britain's labor market continued to cool in the second quarter, with official data showing a slowdown in private sector earnings growth and a significant drop in job vacancies. Private sector regular earnings rose 2.8% annually in the three months to June, the weakest pace since October 2020, and a figure that matched the Bank of England's forecast. The number of open job vacancies fell to 707,000 in the three months to July, the lowest level since April 2021, or since late 2014 if excluding the pandemic period. The unemployment rate held steady at 4.9% for the three months to June, contrary to economists' expectations for a slight decrease. Employment growth in the second quarter was also weaker than anticipated, with an increase of 83,000, and separate data indicated a decline in payrolled employees for the sixth consecutive month in July. Economists suggest these figures point to a labor market that is gradually easing but losing momentum, with risks to employment skewed downwards due to ongoing global uncertainties and potential domestic tax hikes. Public sector wages saw a larger increase of 6.1%, driven by National Health Service pay awards, which skewed overall regular wage growth to 3.5%.