ONS Labour Market Data October 2026: Vacancies Fall to Lowest Level Since 2014

The latest ONS Labour Market data has been released today (20th October 2026). This is the latest estimate of employment, unemployment, economic inactivity and other employment related statistics for the UK from the Office for National Statistics, looking at the last three months of Labour Market data (June to August 2026).

Vacancies have recorded their largest quarterly fall since the start of the year, dropping to 691,000. Outside the pandemic period, this is the lowest level since July to September 2014. The UK unemployment rate has fallen to 4.7%, the employment rate has risen to 75.3% and economic inactivity has fallen to 20.9%. Total pay growth, including bonuses, has slowed to 3.7%, its lowest rate in nearly six years.

Vacancies down by 21,000 to 691,000

Early estimates for July to September 2026 suggest a decrease of 21,000 (2.9%) to 691,000, compared with April to June 2026. Vacancies have fallen by 37,000 (5.1%) on the year. Outside the coronavirus pandemic, the last time there were 691,000 or fewer vacancies was in July to September 2014, when there were 686,000. The ONS said feedback from its Vacancy Survey continues to suggest that smaller firms may not be recruiting because of increases in labour costs.

Payrolled employees fall by 111,000 on the year

Estimates for payrolled employees in the UK fell by 111,000 (0.4%) between August 2025 and August 2026, but increased by 1,000 (0.0%) between July and August 2026. This is based on administrative data from HM Revenue and Customs (HMRC). When looking at June to August 2026, the period comparable with the ONS Labour Force Survey (LFS) estimates, the number of payrolled employees fell by 92,000 (0.3%) over the year and by 37,000 (0.1%) over the quarter.

Now 30.3 million payrolled employees

The early estimate of payrolled employees for September 2026 decreased by 66,000 (0.2%) on the year, but increased by 13,000 (0.0%) on the month, to 30.3 million. The ONS said September figures are provisional and likely to be revised.

Unemployment rate is 4.7%

The UK employment rate based on the LFS for people aged 16 to 64 years was estimated at 75.3% in June to August 2026. This is up by 0.2 percentage points on both the year and the latest quarter.

The UK unemployment rate for people aged 16 years and over was estimated at 4.7% in June to August 2026. This is down by 0.1 percentage points on both the year and the latest quarter. The UK economic inactivity rate for people aged 16 to 64 years was estimated at 20.9%, down by 0.2 percentage points on the year and 0.1 percentage points on the quarter.

UK Claimant Count is estimated at 1.701 Million

The UK Claimant Count for September 2026 increased on the month and on the year to an estimated 1.701 million.

Wages: Total pay growth at lowest rate in nearly six years

Annual growth in employees’ average earnings in Great Britain was 3.7% for regular earnings (excluding bonuses) and 3.7% for total earnings (including bonuses) in June to August 2026. Regular pay growth has been relatively stable over the past six three month periods, while total pay growth fell from 3.9% in the previous period and was last lower in August to October 2020, at 2.8%. Annual average regular earnings growth was 6.3% for the public sector and 3.0% for the private sector, with the ONS noting public sector figures continue to be affected by the timing of pay awards this year.

Annual growth in real terms, adjusted for inflation using the Consumer Prices Index excluding owner occupiers’ housing costs (CPI), was 0.8% for regular pay and 0.9% for total pay in June to August 2026.

ONS Deputy Director of Labour Market Statistics, David Freeman, said:

“While the labour market remains broadly flat in 2026, data from the latest quarter shows the employment rate edging up and a small drop in unemployment. The number of workers on payroll remains slightly down over the same period, though data for the most recent month suggests that might be starting to level off.

“The number of vacancies has seen its largest fall since the start of the year, concentrated mainly within smaller businesses, which cite increased labour costs as a key factor.

“Regular wage growth remained relatively stable, though total pay – including bonuses – has eased to its lowest rate in nearly six years.”

Sector Reaction

Jeanette Wheeler, Chief People Officer at MHR, said:

“This week the Prime Minister said the UK needs to “invest in the success of our young people”, and that comes off the back of his calls last month for a “culture shift” in the way the UK does business, encouraging leaders to take risks. The two are closely linked, and it’s positive to see the government is keen to reinvigorate the economy, but I would be interested to know what that looks like in reality.

“As reported today by the ONS, we’ve seen the UK employment rate inch up, and the unemployment rate and economic inactivity rates fall slightly. We’ve also seen annual growth in employees’ average earnings remain relatively stable, after a year of slowing growth. The signals for a stronger future are there, and the government now needs to practically build on its promises to stimulate the UK economy.

“That means strengthening education-to-employment pathways by giving young people more chances to gain practical work experience and the life lessons that come with it, cutting costs for businesses, and continuing to provide the right guidance around AI, so young people and business leaders have the clarity they need to succeed rather than suffer further ‘moral failures’.

“Reinvigorating the beating heart of British business requires a baby steps approach. All eyes are now turning towards the Autumn Budget, which will provide the perfect opportunity for the government to show how it plans on investing in success – because actions speak louder than words.”

Chris Goulden, Deputy CEO at Youth Futures Foundation, said: 

“The latest labour market data from the Office for National Statistics shows that around 1 in 8 economically active young people not in full-time education (13.3%, around 446,000) are unemployed. A further 1 in 5 young people not in full-time education (19.9%, around 834,000) are economically inactive. Compared with a year ago, there are 28,000 more young people unemployed and 15,000 fewer who are economically inactive.

“As the interim Young People and Work report made clear, the scale and persistence of the challenge facing young people who are not in education, employment or training (NEET) will require ambitious, system-level reform. To achieve meaningful and lasting change, we must continue to strengthen the evidence base to ensure the right programmes and interventions are in place.

“This is why we launched our expanded Youth Employment Toolkit last month, which synthesises high-quality international evidence on 17 of the most common youth employment interventions – including apprenticeships, basic skills training and wage subsidies. By making this evidence more accessible to policymakers and practitioners, we can help inform decisions about where investment and support can make the greatest difference.

“This week, the Prime Minister highlighted both the economic and moral cost of failing to address this issue. As we await next week’s Budget and the final recommendations of the Young People and Work report, we have a significant opportunity to turn evidence into action and improve outcomes for young people. If the UK matched the Netherlands’ youth participation rate, over half a million more young people could be in work or education, delivering a significant long-term boost to the economy.”

Anthony Salcito, Senior VP for Enterprise, Coursera, said:

“Whilst today’s headline figures suggest some positive uptick in overall employment rates, the underlying picture is more troubling. The outlook for graduates and young job-seekers, who face an increasingly challenging and sparse jobs market, is particularly stark.

“As more than a billion young people enter the workforce over the next decade, traditional education models alone cannot meet the scale of the skills challenge the world is facing.  People need access to relevant skills, trusted guidance and clearer pathways into work, supported by tools that help them progress at every stage of their careers. The government can support young people through investment in targeted learning programmes that complement a degree with practical, job-relevant skills in high-demand, high-growth areas like AI, data analysis and cybersecurity.” 

“AI is fundamentally changing where value sits in the workforce. And as investment in AI accelerates, investment in AI upskilling must keep pace. Yet Coursera’s latest Global Skills Report suggests the UK’s AI infrastructure deployment is already advancing faster than its talent readiness. Despite being a world leader for policy, infrastructure, and technology readiness, the UK’s workforce lags behind its competitors on skills preparedness, indicating a disconnect between its ambition to lead in AI and the ability of the workforce to support those ambitions. Addressing this gap requires concerted efforts from the UK’s institutions to ensure that skills development matches technology deployment.”

“Building a future-ready workforce will require sustained investment in skills at every stage of people’s careers. Universities, employers and government must connect education more closely to the changing world of work, equipping people with practical, job-relevant skills while helping them adapt as technology and the economy evolve. The UK’s ability to address today’s labour-market pressures and turn its AI ambitions into real-world impact depends on making that connection stronger.”

Jack Kennedy, Senior Economist at Indeed, said:

“The latest figures indicate a labour market showing some resilience, echoing the wider economy’s better-than-expected performance. However, the continued slide in vacancies points to ongoing hiring caution and puts major pressure on the upcoming Budget, as businesses seek clarity on what it means for their cost base before committing to expanding their workforce.

“For Bank of England policymakers, today’s figures are likely to play second fiddle to the inflation picture. With the groundwork for a November rate hike already laid, a labour market that is weak but not collapsing gives the MPC little reason to deviate from the path it has signalled. 

“Despite a surprise fall in youth unemployment in the latest figures, the recent climb is a reminder of why the government’s Milburn Review matters. Welfare reform and early career support are welcome ambitions, but they need to be matched by conditions in which employers are actually willing to hire. Right now, many aren’t.

“Today’s figures confirm a labour market that is treading water. The question is whether the Budget gives employers a reason to start swimming.”

Kevin Fitzgerald, UK MD at Employment Hero, said:

“Today’s figures reflect what we’re seeing on the ground among the UK’s small businesses. Our latest Employment Index shows that hiring momentum among small businesses is slowing, with employment growth falling from 4.9% in March to 2.9% in September.   

“With the Autumn Budget approaching, SMEs are understandably holding fire. And who can blame them? Over the past two years, they’ve had to navigate successive changes to employment costs and legislation, with our data showing just how long it’s taken for hiring to recover.

“Small businesses have shown remarkable resilience, but with hiring only now returning to

“early-2024 levels, the Chancellor needs to recognise that there is a limit to how much uncertainty they can absorb.”