The United Kingdom's labor market is showing signs of weakening, with approximately 26,000 jobs lost in August. This figure, more than double the 10,000 forecast by economists, contributes to a total of 39,000 job losses over the past three months. An additional 19,000 people lost their jobs in July.
Wage growth has also slowed considerably, with average earnings, including bonuses, rising by only 3.9 percent in the three months to July. This marks the weakest growth rate since November 2020. In the private sector, earnings excluding bonuses fell to 2.9 percent, indicating a broad economic slowdown impacting hiring decisions, particularly at smaller businesses.
In contrast, public sector pay has seen a more robust increase of 6.3 percent during the same period. Despite the job losses and wage stagnation in the private sector, the overall unemployment rate remained unchanged at 4.9 percent in the three months to July, according to the Office for National Statistics (ONS).
The leisure and hospitality sectors have been among the hardest-hit industries. Liz McKeown, director of economic statistics at the ONS, noted that "smaller businesses are continuing to report that increased labour costs are affecting hiring decisions."