UK Unemployment Falls to 4.7% as Job Vacancies Hit Lowest Level Since 2021

Britain’s unemployment rate unexpectedly fell to 4.7 per cent in the three months to August 2026, offering a boost to the government ahead of Finance Minister John Healey’s first budget next week. However, a continued decline in job vacancies points to persistent weaknesses in the labour market.

Figures released by the Office for National Statistics (ONS) on Tuesday, October 20, showed unemployment declined from 4.9 per cent in the previous three-month period, contrary to economists’ forecasts of an increase to 5 per cent.

The number of employees on company payrolls also rose by 13,000 between August and September, reaching 30.3 million.

However, vacancies fell by 21,000 to 691,000 in the three months to September, their lowest level since 2021. The decline has raised concerns about employers’ willingness to recruit amid rising business costs and uncertainty ahead of the government’s budget.

Ben Harrison, director of the Work Foundation at Lancaster University, warned that the fall in unemployment should not make the government complacent, noting that Britain continued to face a prolonged shortage of job opportunities.

Wage data presented a mixed picture. Average earnings excluding bonuses grew by 3.7 per cent annually, up from 3.6 per cent, while growth including bonuses slowed to 3.7 per cent from 3.9 per cent.

Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales, described the labour market as “running on idle”, arguing that employers were restricting recruitment and pay increases in response to rising costs and policy uncertainty.

The figures also showed that 715,000 people aged 16 to 24 were unemployed, although the number fell by 28,000 during the quarter.

Work and Pensions Secretary Pat McFadden said the figures demonstrated resilience in the labour market but acknowledged that more support was needed to help young people find employment.

See also UK Unemployment Falls to 4.7% as Job Vacancies Hit Five-Year Low https://vistaonenews.com/2026/10/20/uk-unemployment-falls-to-4-7-as-job-vacancies-hit-five-year-low/

The latest data will add to the economic debate ahead of the October 28 budget, as policymakers balance employment, inflation and economic growth.