UK employers shed 13,000 workers from company payrolls in July 2026, marking a continuation of a similar decline seen in the previous month. This decrease reflects a tepid demand for staff, driven by heightened uncertainty from both domestic and international events. The Office for National Statistics (ONS) also reported that the number of payrolled employees in July 2026 was 30.3 million, a 0.3% fall or 94,000 fewer employees compared to July 2025. This downturn contributes to an overall trend of declining payrolled employees over the past two years.
Job vacancies in the UK also hit a five-year low, with early estimates for May to July 2026 showing a decrease of 6,000 (0.8%) to 707,000 compared to the previous quarter. This figure represents the lowest level of vacancies since September to November 2014, excluding the COVID-19 pandemic period. Feedback from the Vacancy Survey suggests that smaller firms are hesitant to recruit due to increased labor costs and other operating expenses, exacerbating the weakness in the job market.
Despite the decline in employment, median monthly pay increased by 4.2% in July 2026 compared to the same month last year, reaching £2,642. Annual growth in median pay was highest in the health and social work sector, seeing a 5.3% increase, while the education sector experienced the lowest growth at 3.3%. In terms of sector-specific employment changes, the administrative and support services sector saw the largest increase of 63,000 employees between July 2025 and July 2026, whereas the wholesale and retail sector experienced the largest fall, losing 75,000 employees.
