Wage growth across Great Britain has slowed, as the jobs market cools and companie cut jobs.
The latest labour market data, just released, shows that annual growth in employees’ average earnings (excluding bonuses) slowed to 4.8% in May-July this year, down from 5% a month earlier.
With inflation rising in recent months (to 3.8% in July), this slowdown in earnings means households will be squeezed harder by the cost of living.
Pay rose faster in the public sector – up 5.6% per year – compared with 4.7% for the private sector, the Office for National Statistics reports.
The ONS also flags that company payrolls shrank, by an estimated 142,000 in the year between July 2024 and July 2025, a sign that companies have been cutting back on hiring due to economic uncertainty and the rise in employers’ national insurance rates.
The estimated number of vacancies in the UK fell by 10,000 to 728,000, in June to August, today’s data shows. That’s the 38th consecutive quarterly fall.
The ONS director of economic statistics, Liz McKeown, says: “The labour market continues to cool, with the number of people on payroll falling again, while firms also told us there were fewer jobs in the latest period.
“This weakness is reflected in a slight increase on the quarter in the unemployment rate. The number of vacancies also fell on the quarter, though the rate of decline appears to be slowing.
“Wage growth excluding bonuses edged down further in cash terms, though it remains strong by historic standards.”
Meanwhile, Rachel Reeves will host bosses of top US and UK financial firms in Downing Street on Tuesday morning as the government tries to highlight economic ties between the two countries at the start of Trump’s state visit.
The meeting, which will be jointly hosted by US Treasury secretary Scott Bessent, will see senior bosses from BlackRock, Barclays and Blackstone gather in Whitehall as the chancellor seeks to secure further foreign investment that could help spur growth, and deliver positive headlines ahead of a challenging autumn budget in November.
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