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: “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. 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.” 10am BST: Eurozone industrial production report for July
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