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UK Wage Squeeze Deepens, Unemployment to Reach 5.3%

6/18/2026

31 5 Full Breakdown

Summary

Story summary

Economists warn the wage squeeze will persist through the summer as real private-sector wages have fallen since last October.
UK unemployment is 4.9%.
Job vacancies are at their lowest level since 2021.
Thomas Pugh and Patrick Milnes expect unemployment to rise to about 5.2%–5.3% by Christmas.
Average wage growth February-April was 3.4% (4.4% with bonuses) while private-sector growth slowed to 2.9% and public-sector growth was 5.1%.

History

Historical Context

The 2008 financial crisis sparked a global recession the IMF dated Q3 2008–Q1 2009, sending the United Kingdom into a downturn in Q2 2008. By early 2009 the recession hit the UK labor market and wage growth stalled, mirroring a slump that saw 59 of 71 countries in recession. Today, economists warn that shrinking vacancies revive post-crisis labour strain.

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Story summary

Economists warn the wage squeeze will persist through the summer as real private-sector wages have fallen since last October.
UK unemployment is 4.9%.
Job vacancies are at their lowest level since 2021.
Thomas Pugh and Patrick Milnes expect unemployment to rise to about 5.2%–5.3% by Christmas.
Average wage growth February-April was 3.4% (4.4% with bonuses) while private-sector growth slowed to 2.9% and public-sector growth was 5.1%.

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