ONS said UK pay growth cooled to 4.1% in the three months to May, while unemployment stayed at 4.9%.
Why it matters: Slower wage growth can ease inflation pressure and influence Bank of England rate decisions. The data points to a labour market that is cooling without a sharp rise in joblessness.
- UK total pay growth, including bonuses, slowed to 4.1% in the three months to May from 4.3% in the previous three months.
- Unemployment held at 4.9% in the three months to the end of May.
- Regular pay growth was 3.4% in March to May, while private sector regular pay growth was 2.8% and public sector pay growth was 6.1%.
- The Bank of England held Bank Rate at 3.75% in June and said unemployment was likely to rise gradually.
The latest labour-market release from the Office for National Statistics showed UK pay growth cooling while unemployment remained unchanged.
ONS said average total earnings growth, including bonuses, slowed to 4.1% in the three months to May from 4.3% in the previous three months. Unemployment stayed at 4.9% over the same period.
The same bulletin put regular pay growth at 3.4% in March to May. Private sector regular pay growth was 2.8%, while public sector regular pay growth was 6.1%.
The Bank of England held Bank Rate at 3.75% in June and said unemployment was likely to rise gradually. In its July Monetary Policy Report, the Bank projected unemployment would rise to 5.0% in 2026 Q3 and 5.1% in Q4.
Vacancies also pointed to softer labour demand. ONS said estimated vacancies were down 18,000, or 2.5%, from a year earlier. The statistics office said some small firms may not be recruiting because of higher labour and operating costs. ONS vacancies data
By the numbers
- 4.1% - UK total pay growth in the three months to May, down from 4.3% in the previous three months
- 4.9% - unemployment rate in the three months to the end of May
- 18,000 - annual decline in estimated vacancies, equal to 2.5%