UK Unemployment Falls but Long-Term Joblessness Rises as More People Struggle To Find Work

UK unemployment fell to 4.7 per cent in the three months to August, with 47,000 fewer people out of work than in the previous quarter. However, the latest figures reveal a less encouraging picture for people who have been searching for a job for more than a year.

Long-term unemployment increased over both the quarter and the year, even as the number of people unemployed for shorter periods declined. Meanwhile, employers advertised 21,000 fewer vacancies in the three months to September, leaving the total at 691,000.

The figures suggest that finding work remains difficult for some jobseekers, despite the fall in the overall unemployment rate. Payrolled employment has also declined over the past year, while recruitment opportunities have continued to weaken.

Long-Term Unemployment Moves Against the Trend

The number of people unemployed for more than 12 months rose in June to August compared with both the previous quarter and the same period in 2025. By contrast, unemployment lasting up to six months and between six and 12 months fell over both periods.

Overall, 1.712 million people aged 16 and over were unemployed, down 26,000 on a year earlier. The unemployment rate fell by 0.1 percentage points over the quarter to 4.7 per cent.

Employment offered a more positive signal. The proportion of people aged 16 to 64 who were in work rose by 0.2 percentage points to 75.3 per cent, while the share who were economically inactive fell to 20.9 per cent. An estimated 34.577 million people aged 16 and over were employed.

Job Vacancies Fall To Lowest Level Outside Pandemic

Employers advertised an estimated 691,000 vacancies between July and September, down 2.9 per cent on the previous three-month period and 5.1 per cent on a year earlier. Outside the coronavirus pandemic, the last time vacancies were at this level or lower was in July to September 2014.

Vacancies fell in 14 of the 18 industry sectors. Construction recorded the largest decline, with 7,000 fewer openings. Businesses with one to nine employees accounted for the biggest fall by employer size, with 21,000 fewer vacancies.

Feedback to the Office for National Statistics suggests that smaller firms may be holding back on recruitment because of higher labour costs. The figures do not establish whether this is contributing to the rise in long-term unemployment, but fewer advertised positions mean jobseekers have fewer openings to choose from.

Payroll Employment and Pay Present a Mixed Picture

The number of payrolled employees fell by 111,000 between August 2025 and August 2026, according to HM Revenue and Customs data. An early estimate showed a monthly increase of 13,000 to 30.3 million in September, although that figure remains provisional and could be revised.

Pay continued to grow, but at a slower rate when bonuses were included. Regular earnings, excluding bonuses, increased by 3.7 per cent annually in the three months to August. Total pay also grew by 3.7 per cent, down from 3.9 per cent in the previous three-month period.

The Claimant Count, a separate measure covering people receiving certain unemployment-related benefits, rose to a provisional 1.701 million in September. It is not directly comparable with the overall unemployment figure because it is based on benefit claims rather than the Labour Force Survey's measure of people who are unemployed.

The ONS has cautioned that some labour market estimates remain volatile, particularly for smaller groups. Its next update is due on 17 November.