ONS Latest | Unemployment falls unexpectedly but wage growth slows in fragile labour market

The UK labour market delivered a surprise improvement this month, with unemployment falling to 4.9%, according to the latest Office for National Statistics figures released this morning.

The drop comes after months of rising joblessness and offers a short-term boost to confidence. However, the broader picture remains subdued. Vacancies fell by 3.9% in the latest quarter, continuing a downward trend, while wage growth slowed again. Regular pay rose by 3.6% annually, with total pay at 3.8%, marking the weakest growth since the end of 2020.

Taken together, the figures suggest a labour market that is stabilising on the surface, but still under pressure from economic uncertainty and rising business costs.

CIPD: ‘Reprieve’ may not last

Responding to today’s figures, James Cockett, senior labour market economist for the CIPD, said the fall in unemployment offers little relief.