UK jobs market stays soft before Bank of England decision

Britain's labour market remains weak with job vacancies falling to a four-year low and pay growth holding steady, official data showed today, days before a Bank of England interest rate announcement.

Average weekly earnings, excluding bonuses, grew by 3.5% in the three months to July compared with the same period in 2025, the Office for National Statistics said, and as a Reuters poll of economists had predicted.

Job vacancies in the three months to August fell to 702,000 from 706,000 in the three months to July, the lowest reading since the three months to April 2021. The ONS said small businesses cited a high cost of employment.

The unemployment rate held steady at 4.9% in the three months to July.

The Bank of England is trying to gauge whether higher energy prices caused by the Iran war will interrupt a gradual cooling of wage growth and underlying inflation pressure in Britain.

Investors yesterday were pricing a roughly one-in-three chance of a quarter-point interest rate hike by the Bank of England on Thursday. A rate hike at the following Monetary Policy Committee meeting in November was seen as almost certain followed by another in December.