The UK unemployment rate was 4.7% in the three months to August 2026, down 0.1 percentage points on both the quarter and the year, according to the Office for National Statistics (ONS) labour market bulletin published on 20 October 2026. The statistics body described the labour market as “broadly flat in 2026”.
The headline figures
For June to August 2026, the ONS reported, on a seasonally adjusted basis:
– an employment rate of 75.3% for people aged 16 to 64, up 0.2 percentage points on both the quarter and the year; – an unemployment rate of 4.7% for people aged 16 and over, down 0.1 percentage points on both the quarter and the year; – an economic inactivity rate of 20.9% for people aged 16 to 64, down 0.1 percentage points on the quarter and 0.2 percentage points on the year; – regular pay growth, excluding bonuses, of 3.7%, which the ONS said has been relatively stable over six consecutive three-month periods; – total pay growth, including bonuses, of 3.7%, down from 3.9% in the previous three-month period.
The ONS also reported an early estimate of 691,000 job vacancies for July to September 2026, down 21,000 (2.9%) on the quarter and 37,000 (5.1%) on the year.
Payrolled employees fell by 92,000 (0.3%) on the year and by 37,000 (0.1%) on the quarter in June to August. A provisional estimate for September put payrolled employees at 30.3 million, up 13,000 on the month and down 66,000 (0.2%) on the year. The ONS flagged the September payroll figure and the Claimant Count as provisional and subject to revision. The provisional Claimant Count for September was 1.701 million.
The next release is scheduled for 17 November 2026, according to the ONS.
A lender’s reading of the pay data
Dave Harris, chief executive of specialist over-55s mortgage lender more2life, commented on the figures. He said:
“While modest rising wage growth may seem like good news on the surface, it also makes it more likely that the Bank of England will raise interest rates at its next meeting.
“With oil topping $100 a barrel and inflation climbing again, the Bank’s Monetary Policy Committee may feel it is necessary to step in to stop prices spiralling, and stronger wage growth only adds to the pressure.
“As an over-55s lender, we see every day how hard rising living costs and the threat of higher rates are hitting people in their 50s and 60s. Many are still supporting children, paying off mortgages and trying to save as much as they can into their pensions all at once.
“The reality is that 15 million people are already undersaving for retirement, according to the Pensions Commission. Any prolonged squeeze on their finances will only make that worse.
“Unless something changes, and quickly, millions face a hit to their living standards in retirement. But many have built up substantial wealth in their homes, giving them more options than they might realise.”
The ONS figures show regular pay growth unchanged at 3.7% and total pay growth lower than in the previous period, so whether pay growth is rising depends on the measure and comparison period used.
What the data does and does not show
The ONS bulletin reports pay growth, unemployment and vacancies for the same period, giving a mixed picture: unemployment and inactivity edged lower and the employment rate edged higher, while vacancies and payrolled employee numbers were lower than a year earlier.
The bulletin does not say what the figures mean for the Bank of England’s interest rate decisions. Any view on the Monetary Policy Committee’s next move, including Harris’s, is the commentator’s own assessment.
The ONS notes that its labour market estimates carry sampling variability. For the employment rate, the quarterly and annual changes of 0.2 percentage points are shown with variability of plus or minus 0.4 and 0.6 percentage points respectively, meaning the movement is within the range that sampling alone could produce. The same applies to the unemployment rate, where the 0.1 point falls sit within variability of plus or minus 0.3 and 0.4 percentage points.
