UK Jobs Market Shows Weakness, Interest Rate Hike Unlikely This Week

Britain's jobs market showed signs of weakness in the latest data, with pay growth near a six-year low and a significant drop in job postings. The UK Office for National Statistics reported that average weekly earnings, excluding bonuses, grew by 3.5% in the three months to July compared to the same period in 2025.

This is close to its slowest pace since 2020 and aligns with economists' median forecast. Job vacancies also decreased to 702,000 in the three months to August, the lowest level since 2014 excluding the COVID-19 pandemic period.

The tax office's preliminary measure of payrolled employees dropped by 26,000 in August, while July's reading was revised down from a 13,000 increase to a 19,000 drop. The unemployment rate held steady at 4.9% in the three months to July.

Economists believe this data will allow the Bank of England (BoE) to keep interest rates on hold, despite pressure from inflation caused by the Iran war. However, some analysts predict a potential hike in November if energy prices do not decrease.