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From 32m ago Introduction: UK jobs market under the spotlight Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. UK companies continued to shed jobs over the summer, as wage growth slowed, new data shows. The latest labour market report, just released, shows that the number of employees on company payrolls fell by 26,000 in August, and dropped by 145,000 compared with August 2025.
Despite that drop, though, the UK’s unemployment rate for people aged 16 years and over remains at 4.9% for the May to July quarter. Workers’ pay packets are being squeezed, though, especially in the private sector. Total pay growth (including bonuses) slowed to 3.9% in May to July, down from 4.2% on the previous three-month period.
Regular pay (excluding bonuses) growth stuck at 3.5%. But while private sector pay rose by 2.9%, annual average regular earnings growth was 6.3% for the public sector. That’s because NHS staff pay rises were paid out earlier this year.
ONS director of economic statistics Liz McKeown says: double quotation mark “The labour market remains broadly stable, with employment and unemployment rates largely unchanged in the latest period. However, payrolled employee numbers continue to edge down, with falls over the past year particularly evident in the retail and hospitality sectors. “Regular wage growth has remained relatively stable in recent months, while total pay growth, which includes bonuses, has eased and was last lower nearly six years ago.
There remains a notable difference between public and private sector pay growth, with public sector figures continuing to be affected by the timing of NHS pay awards this year.” The agenda 7am BST: UK labour market report 8am BST: UK grocery inflation report 10am BST: Eurozone industrial production report for July 1.30pm BST: US retail sales report Key events 18m ago Hargreaves Lansdown: Pensioners to get £490 boost under triple lock 23m ago State pension set to rise by 3.9% after wage growth data 30m ago Vacancies dip again. 32m ago Introduction: UK jobs market under the spotlight Supporters of the pension triple lock point out that it has lifted the living standards of the UK’s poorest pensioners. Critics, though, argue that it has been more expensive than expected, and ties the government into increasing the pension bill each year regardless of economic conditions. The Institute for Fiscal Studies (IFS) have worked out that by 2050, the triple lock could have cost as much as £40bn, although the calculations are rather murky.
They say: The triple lock has increased annual spending on the state pension by around £16 billion, compared with uprating in line with average earnings growth since 2010. Current forecasts from the Office for Budget Responsibility suggest that the triple lock will push up state pension spending by £600 million per year in 2029–30, compared with a baseline of increases in line with average earnings. While this is small compared with total state pension spending (of £154 billion per year), each increase adds up over time and the triple lock’s ratcheting effect permanently locks in increases in spending.
This is both costly and very uncertain in the long run, because it depends on the exact path of inflation and earnings. We estimate that by 2050 keeping the triple lock would, in expectation, cost around £20 billion per year in today’s terms. But the high uncertainty means that, in fact, the cost could reasonably be anywhere between £5 billion and £40 billion per year.
Hargreaves Lansdown: Pensioners to get £490 boost under triple lock Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, is also expecting the state pension to rise by 3.9% next year under the triple-lock system. Morrissey explains: double quotation mark “Pensioners stand to be almost £490 better off next year as today’s earnings figures have a huge impact on next year’s state pension. The data, alongside September’s inflation figure and 2.5%, is a key component of the triple lock formula used to increase state pensions.
With CPI inflation currently sitting at 2.9% it seems increasingly likely that today’s 3.9% increase in average earnings will be the figure used. This would put someone on the full new state pension on course to receive £250.70 per week from next April – up from the current £241.30 per week. Someone on a full basic state pension would receive £192.10 per week – up from £184.90.
State pension set to rise by 3.9% after wage growth data The UK state pension is set to rise by 3.9% next year, it appears, following today’s wage growth figures. Under the triple-lock system, pensions rise by the highest of average earnings, inflation, or 2.5%. So today’s data showing that total pay rose by 3.9% over the last year is likely to be the figure used to set the pension increase (unless we get a surge of inflation in September’s data to 4% or higher).
Assuming, of course, that the government continue to stick with the triple-lock – as there are calls to suspend it. Jon Greer , head of retirement policy at Quilter , says: double quotation mark “Today’s earnings figures show wage growth running at 3.9%, which puts a State Pension increase of a similar magnitude firmly on the cards next April under the triple lock. “If confirmed, this would see the full New State Pension rise to over £13,000.
While we will need to wait for September’s inflation figure before the uprating mechanism is formally confirmed, inflation is currently expected to remain below earnings growth, making an earnings-led increase the most likely outcome. “For pensioners, another above-inflation increase will be welcome news and reflects the success of the triple lock in strengthening the value of the State Pension over time. The State Pension remains a crucial source of retirement income for millions of people and continues to provide the foundation upon which many build the rest of their retirement plans.
Vacancies dip again. The estimated number of vacancies in the UK decreased in the latest quarter. The ONS esimates that in June to August there was a decrease of 8,000 (1.1%) to 702,000, compared with March to May 2026.
ONS director of economic statistics Liz McKeown says: double quotation mark “Vacancies remain at their lowest level outside the pandemic period for more than a decade, with smaller businesses continuing to report that increased labour costs are affecting hiring decisions.” The Office for National Statistics has also found that the number of ‘workforce jobs’ in the UK has dropped. It says: double quotation mark The estimated number of workforce jobs in the UK was 36.7 million in June 2026. This is a decrease of 48,000 (0.1%) from March 2026, with decreases of 43,000 (1.0%) in the self-employment jobs component and a decrease of 10,000 (0.0%) in the employee jobs component.
Introduction: UK jobs market under the spotlight Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. UK companies continued to shed jobs over the summer, as wage growth slowed, new data shows. The latest labour market report, just released, shows that the number of employees on company payrolls fell by 26,000 in August, and dropped by 145,000 compared with August 2025.
Despite that drop, though, the UK’s unemployment rate for people aged 16 years and over remains at 4.9% for the May to July quarter. Workers’ pay packets are being squeezed, though, especially in the private sector. Total pay growth (including bonuses) slowed to 3.9% in May to July, down from 4.2% on the previous three-month period.
Regular pay (excluding bonuses) growth stuck at 3.5%. But while private sector pay rose by 2.9%, annual average regular earnings growth was 6.3% for the public sector. That’s because NHS staff pay rises were paid out earlier this year.
ONS director of economic statistics Liz McKeown says: double quotation mark “The labour market remains broadly stable, with employment and unemployment rates largely unchanged in the latest period. However, payrolled employee numbers continue to edge down, with falls over the past year particularly evident in the retail and hospitality sectors. “Regular wage growth has remained relatively stable in recent months, while total pay growth, which includes bonuses, has eased and was last lower nearly six years ago.
There remains a notable difference between public and private sector pay growth, with public sector figures continuing to be affected by the timing of NHS pay awards this year.” The agenda 7am BST: UK labour market report 8am BST: UK grocery inflation report 10am BST: Eurozone industrial production report for July 1.30pm BST: US retail sales report
Source: The Guardian
