UK wide data
The latest figures point to a labour market that is holding steady rather than accelerating, with only modest movement in employment and unemployment levels. The UK employment rate was estimated at 75.1% in the period March to May 2026. This is down 0.1% on the year but up 0.1% on the latest quarter. The UK unemployment rate was estimated at 4.9% in the same period. This is an increase of 0.2% on the year by down 0.1% on the latest quarter. For employers, the figures reinforce the importance of focusing on retention, productivity and workforce planning, as recruitment conditions remain finely balanced and economic uncertainty continues to influence hiring decisions.
Vacancy estimates in the UK decreased in the latest quarter, with early estimates for April to June 2026 suggesting a decrease of 7,000 to 712,000, compared with January to March 2026. While the pace of decline has moderated, vacancy levels remain subdued by historical standards, suggesting that many employers continue to take a cautious and strategic approach to recruitment. The relatively modest fall suggests recruitment demand may be stabilising, but employers remain selective in their hiring decisions as they adapt to a changing workforce and employment law landscape.
Annual growth in employees’ average earnings in Great Britain was 3.4% for regular earnings (excluding bonuses) and 4.3% for total earnings (including bonuses) in March to May 2026. Annual average regular earnings growth was 5.5% for the public sector and 2.9% for the private sector. While wage growth remains positive, the relatively modest increase in earnings is unlikely to offset concerns for workers facing ongoing pressures on household budgets. The stronger growth in public sector pay compared with the private sector reflects the different pressures facing employers, and may present additional recruitment and retention challenges for some private sector organisations competing for talent.
Although the arrival of a new Prime Minister is unlikely to result in any immediate change to the employment law reforms already underway, it does introduce an additional layer of political uncertainty at a time when employers are continuing to adapt to a significant programme of workplace change. As a result, many organisations are likely to favour a measured approach to recruitment, reward and workforce investment until there is greater clarity on the government's longer-term policy direction.
NI data
The latest figures point to a relatively stable picture for Northern Ireland's labour market, with HMRC payroll data indicating continued growth in employment over the past year, while broader survey data shows no statistically significant changes in employment, unemployment or economic inactivity. This suggests that, despite wider economic and workplace pressures, labour market conditions have remained broadly resilient.
The latest earnings data suggests that pay growth in Northern Ireland remains steady, with employees seeing increases in median monthly earnings both over the month and compared with a year ago. Earnings from HMRC PAYE indicated that Northern Ireland employees had a median monthly pay of £2,480 in June 2026, an increase of £21 over the month and an increase of £115 over the year. While rising earnings will be welcome news for many workers, employers are likely to remain focused on balancing pay expectations with increasing employment costs and broader workforce planning priorities.
The latest figures suggest Northern Ireland's labour market continues to strengthen, with employment rising over both the quarter and the year alongside a further reduction in unemployment. The latest Northern Ireland seasonally adjusted unemployment rate for the period March to May 2026 was estimated from the Labour Force Survey at 1.8%. This represents a decrease of 0.4% over the quarter and a decrease of 0.2% over the year. The proportion of people in work increased by 0.8% over the quarter and increased by 0.1% over the year to 72.1%. Taken together, the data points to continued positive momentum in the labour market, although employers are likely to remain focused on sustaining workforce growth while managing ongoing cost and productivity pressures. The extent to which this momentum is sustained is likely to depend on the wider economic backdrop.
Looking ahead, employers in Northern Ireland will continue to monitor developments around the Good Jobs Employment Rights Bill and the wider programme of workplace reform. While the appointment of a new Prime Minister is unlikely to have an immediate impact on Northern Ireland's employment law landscape, it may introduce a degree of uncertainty as businesses assess whether broader UK policy priorities and economic strategy are likely to shift in the months ahead.
Scotland data
The estimates for the labour market in Scotland for March to May 2026 indicate that over the year, the unemployment rate increased while the economic inactivity and employment rates decreased. While unemployment has increased over the past year, the fall in economic inactivity indicates that more people are participating in the labour market, pointing to a mixed but relatively stable picture overall for Scotland.
The headline figures for the period show the employment rate in Scotland was estimated at 74.3%, down 0.6% over the year. By way of comparison Scotland’s employment rate was below the UK rate of 75.1%. Scotland’s unemployment rate was 4.7%, an increase of 1.3% over the year. Scotland’s unemployment rate was below the UK rate of 4.9%. Taken together, the data points to a nuanced position relative to the UK, with lower unemployment providing a degree of resilience despite a more challenging employment picture.
The early seasonally adjusted estimates for June 2026 from HMRC Pay As You Earn Real Time Information indicate that median monthly pay for payrolled employees in Scotland was £2,672, an increase of 4.7% in nominal terms compared with June 2025. This is higher than the growth in median monthly pay for the UK over the same period. While the pace of wage growth has moderated, earnings in Scotland continue to outpace the UK average, which may help support recruitment and retention efforts in a competitive labour market.
Looking ahead, employers continue to navigate a period of significant workplace change as further provisions of the Employment Rights Act 2025 move closer to implementation. While the appointment of a new Prime Minister is not expected to alter the broad direction of travel for employment law reform, it may create some uncertainty around the pace, priorities and delivery of future policy initiatives, particularly where the question of a future Scottish independence referendum is raised once again. This will prompt businesses to keep workforce plans under close review. At the same time, enhanced worker protections and ongoing reforms to trade union rights are likely to support greater union activity and employee engagement, making proactive employee relations strategies increasingly important for both unionised and non-unionised employers.
In the west of Scotland, in particular, it will be interesting to see what impact the Commonwealth Games will have on the local economy and whether it will give employers a positive bounce with a positive effect in the longer term.
