UK Unemployment Holds at 4.9% as Job Growth and Hiring Miss Estimates

The UK labor market showed further signs of softening in the April-to-June quarter, with the ILO unemployment rate holding steady at 4.9%, a tenth of a percentage point above the 4.8% analysts had forecast. Employment rose by just 84,000 over the three-month period, well short of the 130,000-138,000 expected by economists and a sharp slowdown from the 148,000 gain recorded in the prior period. Jobless claims for June fell by 11,000, a reversal from the 6,700 increase seen previously, and the claimant count rate edged down to 4.3% from 4.4%.

Wage growth, a key metric for Bank of England policymakers, came in at 3.5% year-on-year excluding bonuses for the April-to-June period, a touch above the 3.4% consensus estimate, though private-sector wages excluding bonuses rose 2.8% in the three months to June, in line with expectations. The combination of an unemployment rate above forecast, employment growth roughly 40% below expectations, and a separate reading showing UK job security at its lowest since 2023 alongside a dip in consumer confidence reinforced concerns that the labor market is deteriorating more quickly than anticipated, even as wage pressures remain marginally elevated relative to forecasts.