In a surprising turn for the UK job market, unemployment falls to 4.2% in the three months to June, down from 4.4% in the previous quarter, defying predictions of a further weakening. However, wage growth has slowed to 5.4%, marking the smallest increase in two years, according to the Office for National Statistics (ONS). Adjusted for inflation, wages still saw a modest 1.6% rise, suggesting a slight improvement in living standards for many workers. Chancellor Rachel Reeves acknowledged the need for further efforts to support employment and hinted at challenging budget decisions ahead, aimed at strengthening the economy and improving living conditions across the UK.
The ONS report highlighted that while the finance and business services sectors led with a 6.2% wage increase, the construction sector lagged with just a 3.5% rise. Notably, manufacturing saw the largest overall pay growth at 6.7%, reflecting varied performance across industries.
As the Chancellor prepares for her first budget on 30 October, these figures underscore the complexities of balancing economic growth with wage improvement. Reeves’ upcoming decisions on spending, welfare, and tax will be crucial in addressing these challenges and ensuring a more stable economic future.
For more detailed statistics and insights on the UK labour market, you can explore the official UK Government Employment and Labour Market Statistics page.
