Key facts
- Private sector wage growth in the UK slowed to 2.9% in the three months to May 2026.
- This is the lowest growth rate in nearly six years, falling below 3% for the first time since late 2020.
- Overall wage growth across the UK economy remained steady at 3.4% due to higher public sector pay.
- Real regular earnings increased by 0.4% year-on-year.
- The unemployment rate held steady at 4.9% in the three months to May 2026.
- Job vacancies decreased by 7,000 to 712,000 in the three months to June 2026.
Private sector wage growth in the United Kingdom has slowed to 2.9% in the three months to May 2026, marking the lowest level in nearly six years and falling below the 3% threshold for the first time since late 2020, according to data from the Office for National Statistics (ONS).
This deceleration in private sector earnings growth reflects a broader cooling in the British labor market, influenced by persistent operating costs and high borrowing expenses for businesses. Despite this slowdown, overall annual growth in regular wages across the broader economy remained steady at 3.4% in the same period. This stability was supported by higher earnings increases in the public sector, which saw regular pay rise by 5.5%, partly due to National Health Service salary awards.
When adjusted for inflation, real regular earnings across the UK increased by 0.4% year-on-year, providing modest gains in purchasing power. The labor survey also indicated that the national unemployment rate held steady at 4.9% in the three months to May 2026, slightly below forecasts. However, employment opportunities have diminished in several commercial sectors, with the total number of workers on company payrolls falling by 4,000 in June 2026. Job vacancies also continued to decline, dropping by 7,000 to 712,000 in the three months to June 2026, a significant reduction from the peak of approximately 1.3 million vacancies in 2022.