UK unemployment fell to 4. 7% in the three months to August 2026, down from 4. 9% a month earlier and below the 5% economists had expected. The figures arrive two weeks before the budget and provide a mixed picture for Chancellor John Healey, with unemployment easing while employers continue to reduce recruitment.
Early estimates for July to September show vacancies falling by 21,000, or 2. 9%, to 691,000 compared with the previous quarter. It was the first time vacancies had fallen below 700,000 since February to April 2021, and the largest quarterly decline since January to March 2026.
Vacancies fell in 14 of the 18 industry sectors, led by a 7,000 reduction in construction. Four of the five business-size bands also recorded declines, with firms employing one to nine people accounting for the largest fall, at 21,000 vacancies.
Outside the coronavirus pandemic period, the last comparable total was 686,000 in July to September 2014. Survey feedback indicates that smaller firms may be holding back from recruitment because of higher labour costs.
The latest figure is provisional and can be revised as administrative records are updated, including when work capability assessments provide more information about claimants’ ability to work.
Regular employee earnings, excluding bonuses, grew by 3. 7% annually in the three months to August. The vacancy estimates cover positions employers are actively trying to fill from outside their organisations, while employment and earnings data draw on Pay As You Earn records. The figures therefore show unemployment falling even as available openings and reported recruitment by smaller businesses weaken.