UK unemployment has fallen to 4.7%, offering signs of improvement in the labour market, although declining vacancies and weak recruitment confidence suggest employers remain cautious.
The latest Office for National Statistics figures show the unemployment rate fell from 4.9% to 4.7% in the three months to August 2026. The preliminary estimate of payrolled employees increased by 13,000 between August and September.
However, vacancies fell by 21,000 to 691,000 in the three months to September, indicating that the improvement in unemployment has yet to translate into a broader increase in recruitment.
Lauren Thomas, Economist at global hiring and payroll firm Deel, welcomed the fall in unemployment but cautioned against treating it as evidence that the pressures facing employers and jobseekers have passed.
She said: “A fall in unemployment is a welcome sign that employer confidence may be steadying, with the rate having peaked at 5.2% earlier this year. But with youth unemployment still at an 11-year high, one good set of figures is no reason to ease off.”
Separate findings from the CBI/Pertemps Employment Trends Survey 2026 underline the constraints on recruitment. Just 15% of businesses surveyed said they were confident about hiring, compared with 24% in 2025.
The survey also found that 53% were offering fewer apprenticeships than they would like because of wider cost pressures. Meanwhile, 44% said rising recruitment and onboarding costs were pushing them towards experienced candidates, reducing entry-level opportunities for younger workers. CBI
Thomas said: “Confidence is the missing ingredient. Only 15% of UK businesses say they are hiring confidently, down from 24% last year, with labour costs and regulation often cited as pressures. Hiring has to be affordable and simple if businesses are to use it as a growth lever.
“Looking beyond their immediate postcode is one way firms can do this. Businesses that can hire quickly and compliantly, whether down the road or across borders, can find the right skills faster and build more resilient teams. And workers want flexibility, fair pay and support that fits their circumstances. Employers who meet those needs will win the best talent, and the UK has plenty of it.”
The figures present a mixed picture for employers: unemployment is falling, but fewer vacancies and constraints on training continue to limit opportunities, particularly for people seeking their first role.
Sources:
CBI/Pertemps Employment Trends Survey 2026.
Comments supplied by Deel.
