Regular earnings in the private sector rose by 2.8% in the three months to June compared with a year earlier, the weakest rate since the three months to October 2020. According to Reuters, the measure is closely watched by the Bank of England <\/strong>because it provides an indication of domestic inflationary pressure.<\/p>\n\n\n\n Across the economy, regular wage growth stood at 3.5%, while total earnings growth, including bonuses, slowed to 4.1% from 4.4%. Public sector wage growth was considerably stronger at 6.1%, reflecting the timing of NHS pay awards made earlier in 2026 than in the previous year.<\/p>\n\n\n\n Liz McKeown<\/a>, the Office for National Statistics director of economic statistics, said the figures showed \u201csome softening\u201d in the labour market while the overall picture remained broadly unchanged. She said private sector pay growth had continued to ease, while public sector earnings remained elevated because of the latest NHS awards.<\/p>\n\n\n\n Vacancies also continued to fall. According to the Evening Standard, ONS estimates showed around 6,000 fewer vacancies <\/strong>between May and July than between February and April, taking the total to 707,000. That was the lowest level in more than five years and, excluding the pandemic period, the lowest since 2014.<\/p>\n\n\n\n The ONS said the latest decline was driven mainly by smaller businesses. Firms cited higher labour costs and wider operating expenses as reasons for not recruiting new employees or replacing workers <\/a>who had left.<\/p>\n\n\n\n The unemployment rate remained at 4.9% in the three months to June. Employment increased by 83,000 during the second quarter, while separate payroll data showed another decline in the number of employees. Reuters reported that payrolled employee numbers<\/strong> fell by 12,850 in July, marking a sixth consecutive monthly decrease.<\/p>\n\n\n\n For workers, the slowdown in private sector pay comes as higher energy costs create renewed pressure on household finances. According to The Guardian, annual earnings growth after accounting for inflation was 1.3% in the three months to June. Economists have warned that rising energy costs connected with the Iran war could intensify the squeeze on living standards.<\/p>\n\n\n\n The weaker labour market is also being monitored by the Bank of England. Policymakers have indicated that softer employment conditions may limit the risk of higher energy prices feeding into persistent wage and price pressures. Jake Finney<\/a>, senior economist at PwC UK, described the latest picture as relatively benign, saying the jobs market remained \u201csoft\u201d but was not collapsing.<\/p>\n\n\n\n![\"\"](\"https:\/\/en.econostrum.info\/uk\/wp-content\/uploads\/sites\/6\/2026\/08\/Whole-Economy-Year-on-Year-Three-Month-Average-Growth-Seasonally-Adjusted-Total-Pay-Excluding-Arrears-\u00a9ONS-1200x727.jpg\")
Employment Holds up While Pressure on Households Builds<\/strong><\/h2>\n\n\n\n