02 August 2026
UK economy – unemployment steady and inflation down again
The unemployment rate for the three months to May remained steady at 4.9%, though there is evidence of softness in the labour market – with employers seemingly neither hiring or firing and a rise in economic inactivity.
NIESR’s Wage Tracker shows that average earnings growth held steady at 3.4% to May, with tighter private sector wages offset by stronger public sector settlements. Overall wage growth is expected to fall to 3.0% by September.
The inflation tracker showed CPI inflation falling again in June from 2.8% to 2.6%. However, the forecast is still for inflation to begin to rise from July, though with a peak below the 4.0% previously forecast for the end of the year. The effect of the military action and uncertainty surrounding the Middle East is still contributing.
Read the latest Wage Tracker and Inflation Tracker from NIESR.
NIESR’s Wage Tracker shows that average earnings growth held steady at 3.4% to May, with tighter private sector wages offset by stronger public sector settlements. Overall wage growth is expected to fall to 3.0% by September.
The inflation tracker showed CPI inflation falling again in June from 2.8% to 2.6%. However, the forecast is still for inflation to begin to rise from July, though with a peak below the 4.0% previously forecast for the end of the year. The effect of the military action and uncertainty surrounding the Middle East is still contributing.
Read the latest Wage Tracker and Inflation Tracker from NIESR.
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