UK Labour Market (Apr/May): Economics - Data Reactions

Research evidence excerpt

UK Labour Market (Apr/May): Economics - Data Reactions

18 June 2026

UK Labour Market (Apr/May) EconomicsData Reactions-

A little brighter United Kingdom

◆ The UK jobs data paint a mixed, but somewhat brighter picture… Elizabeth Martins

Senior Economist, UK

◆ … with only one measure now showing employment falling y-o-y, and the HSBC Bank plc liz.martins@hsbc.com

decline in vacancies slowing +44 20 7991 2170

◆ Overall pay growth surprised to the upside, but for private sector employees, it

continues to slow, particularly in real terms

Facts

The UK jobs picture looked a little better in April, with the unemployment rate inching down from 5.0% to

4.9% (consensus: 5.0%). As chart 1 shows, the single-month readings which go into the headline 3-month

average rate have been particularly volatile of late – making the rate harder to forecast and interpret.

It’s a similar picture for employment (chart 2). The dramatic fall in payrolls employment in April was revised

away only partially (from -100k to -53k, which is still the biggest drop since November 2020). But there

was a small increase in May (+2k).

Meanwhile, the workforce jobs measure for Q1 was a little stronger, rising 0.7% q-o-q in Q1 2026. This

was led by human health and social care (+61k jobs/+1.2% q-o-q).

The headline LFS employment measure also rose by a healthy 100k in the three months to April (+0.3%

3m/3m or 1.2% 3m/yr).

So of the three, it’s only the PAYE measure that is now showing a y-o-y decline in employment.

Latest figures show both public and private sector employment flat in Q1, with the former down 0.1% y-o-y

and the latter up 0.1% over the same period. This somewhat contradicts the workforce jobs data, though,

which show health, education and public administration jobs rising in the first quarter.