ONS · Labour Market Overview & Average Weekly Earnings · September 2026 · Released 15 September 2026
Vacancies fall to their lowest since 2014 as the public–private pay gap widens again
Unemployment held at 4.9%, vacancies fell to 702,000 — their lowest since 2014 outside the pandemic — and payrolls kept shrinking, with August's flash estimate down 145,000 on the year. Underneath the headline, the pay split widened again: public sector regular pay growth accelerated to 6.3% while private sector growth ticked up only marginally to 2.9%, leaving a gap of 3.4 percentage points that has now widened for four straight periods. All of it published two days before the MPC decision — figures the Bank already had in hand on Monday.
The jobs market
4.9%
Unemployment · May–Jul · +0.2pp on year, little changed on quarter
702k
Vacancies · Jun–Aug · lowest since 2014 outside Covid
30.2m
Payrolls · Aug flash (provisional) · −145,000 (0.5%) on year
The pay-growth divergence
6.3%
Public sector regular pay growth · up from 6.1%
2.9%
Private sector regular pay growth · still near a six-year low
3.4pp
Public–private pay-growth gap · widened for a 4th straight period
Key Points
Unemployment held at 4.9% in the three months to July — up 0.2 points on the year, little changed on the quarter. Employment was 75.1% (−0.1pp on year, little changed on quarter); inactivity eased to 20.9% (−0.1pp on both the year and the quarter).
Vacancies fell again. The June–August estimate of 702,000 was down 8,000 (1.1%) on the quarter and 16,000 since the start of the year. Outside the pandemic, vacancies have not been this low since August–October 2014.
Payrolls kept shrinking. HMRC's July figure was down 101,000 (0.3%) on the year and 19,000 (0.1%) on the month. August's flash estimate — provisional and likely to be revised — puts payrolls at 30.2 million, down 145,000 (0.5%) on the year.
The Claimant Count rose to 1.692 million in August, up on both the month and the year (provisional, subject to revision).
Pay growth held rather than slowed. Regular pay growth was steady at 3.5% in the three months to July — stable for five straight periods; total pay growth eased to 3.9% (from 4.2%), the weakest since September–November 2020. Real regular pay rose 0.6% on CPIH, a third consecutive improvement, though still short of the 2%-plus readings of 2024.
The public–private pay-growth gap widened for a fourth consecutive period — from 2.6 points in March–May to 3.3 points in April–June and 3.4 points now. Public sector regular pay accelerated to 6.3% (from 6.1%); private sector regular pay ticked up only marginally to 2.9%, against the run of the last two years and still close to last month's six-year low.
Workforce jobs stood at 36.7 million in June, down 48,000 on the quarter; public sector employment rose to 6.21 million, up 33,000 (0.5%) on the year.
The Public–Private Pay-Growth Gap
Regular pay annual growth, 3-month average — public vs private sector
Period
Private (%)
Public (%)
Gap (pp)
Sep 2025
4.2
6.6
2.4
Nov 2025 (recent peak)
3.6
7.9
4.3
Mar 2026 (Jan–Mar)
3.1
4.8
1.7
Apr 2026 (Feb–Apr)
3.0
5.1
2.1
May 2026 (Mar–May)
2.9
5.5
2.6
Jun 2026 (Apr–Jun)
2.8
6.1
3.3
Jul 2026 (May–Jul)
2.9
6.3
3.4
Four periods of widening in a row now, after the gap spiked to a 4.3-point peak last November, narrowed to a 1.7-point trough in January–March, and has widened in every reading since. The one wrinkle this month: private sector pay growth ticked up rather than falling further — not enough to change the story, but worth watching before calling this a clean, one-directional divergence.
Note: ONS brought forward its review of Workforce Jobs seasonal adjustment after finding evidence of changing seasonal patterns, but has postponed implementation while further work is completed. The September estimates remain on the existing seasonal-adjustment basis, with ONS advising caution over short-term movements.
Why This Matters
This is still a soft labour market. Unemployment is higher than a year ago, vacancies are back at 2014 levels outside the pandemic, and payroll employment has been drifting lower for the best part of two years. The one wrinkle this month is private-sector pay: regular earnings growth edged up to 2.9% rather than falling again. Worth noting, but not overplaying — it is still close to its weakest rate since 2020 and remains miles behind the public sector, where regular pay growth is running at 6.3%.
That gap is becoming difficult to ignore. Public-sector pay growth is now 3.4 percentage points above the private sector, after widening for four straight periods. ONS still flags the timing of public-sector awards, but this is looking less like a one-off distortion and more like a persistent divide between the state and the economy that pays for it.
What This Means for the Economy
For the MPC, the message is fairly clear. The Bank had these numbers on Monday, ahead of Thursday's decision, and there is very little here to make the case for tighter policy: unemployment is higher than a year ago, vacancies are back at 2014 levels, and private-sector regular pay growth is below 3%. Inflation elsewhere in the economy still matters, but the labour market is not the problem it was. For the Treasury, the contrast is harder to explain away. Public-sector regular earnings are rising at more than twice the private-sector rate, while payroll employment is falling and vacancies continue to disappear. The state is still setting its own pay bill on terms increasingly detached from the private economy expected to fund it.
Next release · ONS Labour Market Overview & Average Weekly Earnings — 20 October 2026