UK companies continued to reduce staffing over the summer as wage growth eased, according to the latest labour-market figures cited by The Guardian. The number of employees on company payrolls fell by 26,000 in August and was 145,000 lower than a year earlier.
The unemployment rate for people aged 16 and over remained unchanged at 4.9% for the May-to-July quarter. The Office for National Statistics said payrolled employee numbers had continued to edge down, with declines over the past year particularly visible in retail and hospitality.
Total pay growth, including bonuses, slowed to 3.9% in the three months to July, from 4.2% in the preceding three-month period. Regular pay growth, excluding bonuses, remained at 3.5%. The figures showed a marked difference between sectors: private-sector pay rose by 2.9%, while average regular earnings in the public sector grew by 6.3%, partly because NHS pay increases were paid earlier in the year.
ONS director of economic statistics Liz McKeown said the labour market remained broadly stable, but added that total pay growth had eased to its lowest level in nearly six years. She also said smaller businesses continued to report that higher labour costs were affecting hiring decisions.
Vacancies fell by 8,000, or 1.1%, to 702,000 in the June-to-August period compared with the previous quarter, according to the ONS. The estimated number of workforce jobs also decreased by 48,000 to 36.7 million in June 2026, with falls in both self-employment and employee jobs.
The 3.9% pay-growth figure could also influence next year’s state pension uprating. Under the triple lock, pensions increase by whichever is highest among average earnings, inflation and 2.5%. Helen Morrissey of Hargreaves Lansdown said the full new state pension could rise from £241.30 to £250.70 a week, while the full basic pension could increase from £184.90 to £192.10. The final rate depends on September inflation data and whether the government maintains the triple lock.