Vacancies have had their largest quarterly fall this year, and total pay growth is at its weakest since 2020, according to the Office for National Statistics. In the South East, unemployment rose to 4.2%.
The UK unemployment rate was estimated at 4.7% in June to August 2026, down 0.1 percentage points on both the previous quarter and the year, the Office for National Statistics (ONS) said on Tuesday 20 October.
The ONS described the labour market as remaining “broadly flat in 2026”. The employment rate for people aged 16 to 64 was estimated at 75.3%, up 0.2 percentage points on the quarter and the year, and the economic inactivity rate at 20.9%.
Vacancies
Early estimates put vacancies at 691,000 in July to September 2026, a fall of 21,000 (2.9%) on April to June and of 37,000 (5.1%) on the year. The ONS said it was the largest quarterly fall since January to March 2026, and that outside the coronavirus pandemic the last time there were 691,000 or fewer vacancies was July to September 2014.
The ONS said feedback from its Vacancy Survey “continues to suggest that smaller firms may not be recruiting because of increases in labour costs”.
Pay
Annual growth in regular pay, excluding bonuses, was 3.7% in June to August 2026, and has been relatively stable for six consecutive three-month periods. Growth in total pay, including bonuses, fell to 3.7% from 3.9%; the ONS said it was last lower in August to October 2020.
Adjusted for inflation using CPIH, regular pay grew by 0.6% and total pay by 0.7%. Regular pay growth was 6.3% in the public sector and 3.0% in the private sector; the ONS said public sector figures continue to be affected by the timing of pay awards.
Payrolled employees
HM Revenue and Customs data showed 111,000 (0.4%) fewer payrolled employees in August 2026 than a year earlier, but little change on July, with a rise of 1,000. The early estimate for September, which the ONS says is provisional and likely to be revised, was 30.3 million, up 13,000 on August and down 66,000 on the year.
The Claimant Count rose on the month and on the year to an estimated 1.701 million in September 2026.
The South East
The ONS regional figures show the South East unemployment rate at 4.2% in June to August 2026, up 0.2 percentage points on the quarter and on the year, below the UK rate. The region’s employment rate was 78.6% and its economic inactivity rate 17.9%. The ONS does not publish Kent figures in its monthly release.
Key information
- UK unemployment rate: 4.7% (June to August 2026), down 0.1 points on the quarter and year.
- Vacancies: 691,000 (July to September 2026), down 21,000 on the quarter.
- Regular pay growth: 3.7%; total pay growth: 3.7%, the lowest since 2020.
- South East unemployment rate: 4.2%, up 0.2 points.
- All figures are ONS estimates and may be revised.
Sources: Office for National Statistics, Labour market overview, UK: October 2026 and Labour market in the regions of the UK: October 2026, 20 October 2026.