UK labor market data for July showed a slight deterioration in employment alongside a modest easing in pay growth. Payrolled employment fell by -8k, or -0.0% m/m, marking a -0.5% yoy drop compared to the same period last year. The number of payrolled employees has been trending lower since peaking in 2024, highlighting a gradual cooling in hiring momentum. Median monthly pay growth slowed marginally to 5.7% yoy from 5.8% yoy, while the claimant count dropped by -6.2k, sharply better than expectations of a 20.8k increase.
In the three months to June, unemployment rate held steady at 4.7%, in line with forecasts. Wage growth metrics were mixed. Average earnings including bonuses slowed from 5.0% to 4.6% yoy, falling short of expectations for 4.7%. Earnings excluding bonuses were unchanged at 5.0% yoy, matching forecasts.
