UK Unemployment Falls to 4.7% as the Jobs Survey Jumps, While Payrolls and Vacancies Keep Shrinking
The ONS survey counted 102,000 more people in work, far above forecasts, but tax records still show fewer employees than a year ago. Regular pay growth rose to 3.7% before the Bank of England's November 5 decision.
- UK unemployment fell to 4.7% in the three months to August 2026, below the 4.9% expected, as the Labour Force Survey counted 102,000 more people in work.
- Tax-record payrolls were 92,000 lower than a year earlier, and vacancies fell to 691,000, the first reading below 700,000 since early 2021.
- Regular pay grew 3.7% from a year earlier, above the 3.6% Reuters poll forecast; total pay growth slowed to 3.7% from 3.9%.
Reaction by asset (real prices)
| Asset | 2m before | At release | +1m | +10m | +1m % | +10m % |
|---|---|---|---|---|---|---|
| GBPUSD | 1.33 | 1.33 | 1.33 | 1.33 | +0.09% | +0.14% |
UK unemployment fell to 4.7% in the three months to August 2026, from 4.9% in the previous reading and below the 4.9% economists expected, the Office for National Statistics said on Tuesday, October 20. Its Labour Force Survey counted 102,000 more people in work than in the previous three months, after a rise of 67,000 a month earlier and far above forecasts, which ranged from 5,000 to 20,000 depending on the poll. The figures reached the MoveSurge news feed at 07:00:00 London time (06:00:00 UTC). The pound rose 0.09% against the dollar in the first minute and was 0.14% higher after ten minutes.
The survey and the payroll data disagree
The same release carried weaker numbers from other sources. Payroll data from tax records showed 92,000 fewer employees in August than a year earlier, a fall of 0.3%, although the early estimate for September showed a gain of 13,000 and August was revised to a gain of 1,000 from a first estimate of a 26,000 drop. Job vacancies fell to 691,000 in July to September, the first reading below 700,000 since February to April 2021.
| Measure | Latest | Expected | Previous |
|---|---|---|---|
| Unemployment rate, June to August | 4.7% | 4.9% | 4.9% |
| Employment change, three months (survey) | +102,000 | +5,000 to +20,000 | +67,000 |
| Payrolled employees, change over the year to August | -92,000 | ||
| Payrolled employees, September early estimate | +13,000 | +1,000 (August, revised) | |
| Vacancies, July to September | 691,000 | ||
| Regular pay growth, excluding bonuses | 3.7% | 3.6% | 3.6% (revised) |
| Total pay growth, including bonuses | 3.7% | 3.8% | 3.9% |
The Labour Force Survey asks households whether people are working, while the payroll figures count employees paid through the tax system, so self-employed people show up only in the survey. The survey has also struggled with low response rates, and the ONS warned that its figures can swing sharply from one release to the next. The ONS described the labour market as broadly unchanged so far in 2026.
Pay growth and the Bank of England
Regular pay, which excludes bonuses, grew 3.7% from a year earlier, above the 3.6% Reuters poll forecast, and the previous reading was revised up to 3.6% from 3.5%. Private-sector regular pay grew 3.0% and public-sector pay 6.3%, a figure the ONS said reflects when some pay awards were paid. Total pay growth, including bonuses, slowed to 3.7% from 3.9%.
The Bank of England's next rate decision is on November 5, with Bank Rate at 3.75%. Policymakers are weighing a rise to 4.00% as they judge whether the energy price shock is feeding into wage demands, and Reuters linked Tuesday's data to the chance of a hike next month. A firmer pay figure supports that case, while the payroll and vacancy figures show a weaker labour market.
How sterling moved
GBP/USD traded at 1.3328 just before the release, 1.3340 one minute later and 1.3347 after ten minutes, a rise of 0.14%. The chart, which runs to 14 minutes after the release, ends at 1.3349, up 0.15%. Sterling also rose about 0.12% against the yen. For a jobs figure several times the forecast, the move was small.
What is the UK unemployment rate in 2026?
The Office for National Statistics said on October 20, 2026 that unemployment was 4.7% in the three months to August, down from 4.9% in the previous reading and below the 4.9% economists expected.
Why do UK payrolls fall while the jobs survey rises?
The Labour Force Survey asks households about work and includes the self-employed, while payroll data counts employees paid through the tax system. The survey counted 102,000 more people in work over three months, while payrolls were 92,000 lower than a year earlier.
How did the pound react to the UK jobs data?
GBP/USD rose 0.09% in the first minute after the 07:00 London release and was 0.14% higher after ten minutes, at 1.3347.
Sources
-
Labour market overview, UK: October 2026
— Office for National Statistics
Unemployment 4.7% in June to August 2026; payrolled employees down 92,000 (0.3%) over the year to August; vacancies 691,000 in July to September, the first reading below 700,000 since February to April 2021; figures can be volatile.
-
UK wages grew by annual 3.7% in three months to August, ONS says
— Reuters via Investing.com
Regular pay up 3.7% against a 3.6% Reuters poll forecast; previous figure revised; total pay 3.7% against 3.8% expected; private 3.0% and public 6.3%.
-
UK jobs market shows some recovery signs as BoE mulls rate hike
— Reuters via 93.3 The Drive
Bank of England meets November 5 with Bank Rate at 3.75% and a hike to 4.00% under consideration; payroll revisions and September early estimate.
-
4.7%: United Kingdom Unemployment Rate unexpectedly falls in three months to August
— FXStreet
Unemployment 4.7% against 4.9% expected and 4.9% previously.
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