UK unemployment falls to 4.7% in August, below forecasts
Employment rose by 102,000 in the month, far above the 5,000 expected, while wage growth slowed to 3.7%.
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UpdateTuesday, October 20, 2026 at 2:06 AM ET
The Bank of England held its Bank Rate at 3.75% on 17 September, with policymakers voting 6-3 against raising it to 4%, the Bank said. Its next decision is due on 5 November. Inflation stands at 3.1%, above the Bank's 2% target. Market pricing as of 13 October put an 88% chance on a quarter-point rise in November, against 12% for a hold, according to Mortgage One. Traders had also priced the Bank Rate reaching about 4.5% by April 2027 and 4.9% by October 2027, Mortgage One's forecast showed. Employment had risen 66,000 in the previous three-month period, before August's 102,000 gain.
Britain's unemployment rate fell to 4.7% in August, official figures showed, against expectations of 4.9% and down from 4.9% the prior month.
Employment rose by 102,000 in the same report, far above the 5,000 forecast. Average weekly earnings grew 3.7% year over year, below the 3.8% expected and slower than the prior reading.
The slowdown in wage growth gives Bank of England officials such as Andrew Bailey and Dave Ramsden less immediate pressure to act on inflation. Both had spent recent weeks flagging persistent energy costs and wage growth as reasons the no-hike stance was getting harder to hold, according to remarks on October 8.
The stronger labor market reading cuts against the case made by Bank of England policymaker Swati Dhingra, who argued on September 24, citing signs of easing price pressures and weakness in the UK labor market, that financial conditions had already done much of the tightening needed, according to FXStreet, citing Reuters. For US-focused readers, the data serves as background on UK policy rather than a direct driver of American equities, since it says nothing about Federal Reserve policy or domestic earnings.
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