UK unemployment falls to 4.7% ahead of Budget

Summarised from 4 outlets · 5 reports · Updated 20 Oct, 08:02 · Archive

The UK unemployment rate fell to 4.7% in June to August, beating expectations of a rise to 5%.

The UK unemployment rate fell to 4.7% in the three months to June to August, down from 4.9% in the previous quarter, according to Office for National Statistics data published on 20 October. The fall came as a surprise to economists, who had forecast the rate would rise to 5%.

Employment rose during the period, with 102,000 additional jobs created in the quarter, bringing total employment to 34.577 million. The number of people unemployed fell by 47,000 to 1.712 million. There was also a small fall in economic inactivity, down 16,000 to 9.091 million.

The payrolled workforce showed more recent signs of stabilisation. The number of payrolled employees rose by 13,000 between August and September to 30.3 million, according to ONS data.

Average regular earnings growth rose to 3.7% in the three months to August, up from 3.6% the previous quarter. When adjusted for inflation using the Consumer Prices Index, real wage growth stood at 0.8%, remaining below 1% annually. Average wage growth including bonuses fell to 3.7% from 3.9%.

Despite the employment improvements, the labour market showed signs of weakness in vacancies. The number of job vacancies fell by 21,000 in the three months to September to 691,000, representing the largest quarterly fall since the start of the year and the lowest level since 2021. The Mirror reports that construction jobs saw the biggest drop in vacancies, with the publication attributing the falls to businesses being hit by increases to National Insurance contributions and the minimum wage.

The data provides a backdrop to Chancellor John Healey's Budget, scheduled for 28 October. The figures were interpreted by some outlets as supporting a case for interest rate action, with Sky News suggesting they would support a Bank of England rate hike, while The Guardian noted that wage growth above inflation remained a concern for interest rate setters.

How it is being reported

• UK unemployment rate falls in pre-Budget boost for Chancellor John HealeyThe rate of UK unemployment fell to 4.7% in the three months to August, down from 4.9% in the three months to July, the Office for National Statistics saidThe Mirror · 20 Oct, 07:54
• Surprise drop in UK unemployment to 4.7%ONS data shows rate down from 4.9% but number of job vacancies continues to shrink Business live – news updates Unemployment in the UK fell unexpectedly in the three months to August, to 4.7% from 4.9%. The Office for National Statistics figures, which provide a backdrop to the budget on 28 October, also showed that the number of payrolled employees rose by 13,000 between August and September, to 30.3m. Continue reading...Guardian World · 20 Oct, 07:29
• UK unemployment rate falls in pre-budget boost, but firms keep cutting vacancies – business liveRolling coverage of the latest economic and financial news Once you account for inflation, UK real wage growth remained below 1% last month. Annual real regular pay growth was broadly unchanged at 0.8% in June to August, the ONS reports, based on the CPI inflation measure. Continue reading...The Guardian · 20 Oct, 07:25
• Unemployment rate dips to 4.7% while earnings growth rises to 3.7% one week before the BudgetThe UK unemployment rate for people aged 16 years and over was estimated at 4.7 per cent in June to August 2026, the Office for National Statistics said today.Daily Mail · 20 Oct, 07:16
• Surprise dip in jobless rate supports interest rate hikeThe UK's unemployment rate has fallen to 4.7%, in a set of official figures that will support the case for a Bank of England interest rate hike next month.Sky News · 20 Oct, 05:31

In this story: Office for National Statistics · John Healey · Bank of England · United Kingdom

This summary was written by AI from the headlines and standfirsts above, and states as fact only what at least two outlets report. How we use AI · Report a problem