Wage growth across Great Britain has slowed, with annual growth in employees’ average earnings (excluding bonuses) falling to 4.8% in May-July, down from 5% a month earlier, according to the Office for National Statistics (ONS). The slowdown comes as the jobs market cools and companies cut jobs, squeezing households further amid rising inflation, which reached 3.8% in July.
Public sector pay rose faster at 5.6% annually, compared to 4.7% in the private sector. The ONS also reported that company payrolls shrank by an estimated 142,000 in the year to July 2025, indicating reduced hiring due to economic uncertainty and higher employers' national insurance rates. Vacancies fell by 10,000 to 728,000 in June-August, marking the 38th consecutive quarterly decline.
Liz McKeown, ONS director of economic statistics, said: “The labour market continues to cool, with the number of people on payroll falling again, while firms also told us there were fewer jobs in the latest period. This weakness is reflected in a slight increase on the quarter in the unemployment rate. Wage growth excluding bonuses edged down further in cash terms, though it remains strong by historic standards.”
Separately, Chancellor Rachel Reeves will host bosses of top US and UK financial firms in Downing Street on Tuesday, alongside US Treasury Secretary Scott Bessent, as the government seeks to secure foreign investment ahead of a challenging autumn budget in November.
