Government · UK · Office for National Statistics
UK pay growth slows to 3.4% as job vacancies fall
Britain’s jobs market kept cooling through spring 2026. Pay is still rising faster than prices, but only just, while hiring slows and vacancies drift down, according to the latest ONS labour market figures.
Source published Summarised
Key findings at a glance
- 75.1% UK employment rate for people aged 16 to 64 in March to May 2026
- 4.9% UK unemployment rate for people aged 16 and over, up over the year
- 712,000 estimated UK job vacancies for April to June 2026, down again on the quarter
- 3.4% annual growth in regular pay, excluding bonuses, across Great Britain
- 4.3% annual growth in total pay, including bonuses, over the same period
- 0.3% real-terms growth in regular pay once CPIH inflation is stripped out
- 2.9% annual pay growth in the private sector, the part of the economy most ad budgets track
- 1.689 million the UK Claimant Count for June 2026, up on the month but lower over the year
- 30.3 million early estimate of payrolled employees in June 2026, lower than a year earlier
What the report covers
The Office for National Statistics published its Labour Force Survey-based labour market overview for July 2026 on 21 July 2026, pulling employment, unemployment, economic inactivity, pay and vacancies into a single monthly read. It combines the household-based Labour Force Survey with HM Revenue and Customs payroll records and the Claimant Count, so the picture is triangulated rather than resting on one source.
The direction of travel is a gentle cooling rather than a downturn. The employment rate held at 75.1% and unemployment edged up to 4.9% over the year, while vacancies fell for another quarter to 712,000. Pay is still climbing, with regular earnings up 3.4%, but once inflation is stripped out that leaves only 0.3% of real growth in workers’ pockets.
That thin real-terms margin matters more than the nominal figures. It echoes the wider squeeze we covered in our report on how UK cost-of-living pressure eased through spring 2026: households are no longer going backwards, but they are not flush either.
What this means for UK marketers
For UK marketers, this is a demand-planning signal more than a jobs story. A labour market that is cooling without collapsing points to a consumer who is steady but watchful: real pay growth of 0.3% means most households can still spend, yet have almost no extra headroom for impulse purchases. Expect longer consideration windows, more comparison shopping and sharper sensitivity to price and delivery cost through the second half of the year.
The practical response is to lead with value and proof, not urgency for its own sake. Creative that spells out cost per use, longevity, guarantees and clear returns policies will outperform vague aspiration when budgets are tight. This is the moment to protect conversion rate and average order value rather than chase reach, and to make sure paid budgets lean toward high-intent search and retargeting over broad awareness. Our digital marketing team plans client budgets around exactly this kind of macro read, shifting spend toward the channels that convert cautious buyers.
There is a B2B angle too. Falling vacancies and a slipping Claimant Count trend suggest firms are slowing recruitment, which lengthens sign-off on new supplier and agency contracts. Lead-generation campaigns should assume more stakeholders and slower decisions, and lean on case studies and ROI evidence to de-risk the buy. It also feeds the rate-setting backdrop the Bank of England watches, and cheaper borrowing later in the year would lift big-ticket categories first. The consumer-spending trail is worth tracking alongside this: our read on UK card spending indicators shows where that caution is already landing.
How they got the data
The figures draw on three sources. The Labour Force Survey, a large household survey, is the lead measure for participation and the sole source for unemployment and economic inactivity. HM Revenue and Customs Pay As You Earn Real Time Information provides payrolled-employee counts from administrative tax records, and the Claimant Count tracks people claiming unemployment-related benefits. Because each is collected differently, small divergences between them are normal, and the ONS advises focusing on longer-term movements rather than single-month changes.
Two caveats apply. Enhancements to the Labour Force Survey introduced from January 2024 mean year-on-year changes reflect both real shifts and improved survey quality, so headline movements should be read with care. The June 2026 payroll and Claimant Count figures are provisional and are routinely revised as more administrative data arrives. Pay growth is reported in both nominal and real terms, with real figures adjusted using CPIH inflation.
Government · UK
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From Office for National Statistics · published 21/07/2026