By: Editorial Team, StoneX Media
UK vacancies have fallen by a further 6,000 to 707,000, the lowest level since 2021, and employers removed another 13,000 workers from company payrolls in July. The Bank of England rate path is caught between that cooling labor market and average earnings still running at 3.5% year on year, which is why policy has not moved decisively in either direction. Unemployment held unchanged at 4.9% in the three months to June, slightly above expectations of 4.8%, so the headline itself gives the central bank little to act on. Beneath it, the hiring picture and the pay picture are telling two different stories at once.
Fiona Cincotta, StoneX Senior Market Analyst, has spent more than 15 years trading and analyzing UK, European and U.S. markets, working across foreign exchange, equities and commodities with a particular focus on UK and European themes. That coverage runs directly through the data the Bank of England is weighing, from labor market releases and wage settlements to the consumer price index prints that shape rate expectations.
UK vacancies fell by 6,000 to 707,000, the lowest level since 2021, and that decline sits alongside 13,000 workers removed from company payrolls in July. The pullback is not spread evenly, and the cost side is doing most of the work, with Cincotta noting that "businesses, particularly smaller companies, are increasingly holding back from hiring because of those higher labor and operating costs that they're experiencing". Consequently, the weakness shows up in hiring intentions well before it shows up in the unemployment rate, which held unchanged at 4.9% in the three months to June. For traders watching the UK labor market, vacancies and payroll counts are the faster read, and both are pointing the same way. As Cincotta puts it, "the message from the labor market is pretty clear, conditions are continuing to weaken".
"The jobs market isn't generating the kind of wage pressure that would force the Bank of England to hike rates", Cincotta says, and that is only half of the problem facing the central bank. Average earnings came in slightly stronger than expected at 3.5% year on year against 3.4% previously, yet the composition tells a different story, because private sector wage growth slowed to 2.8%, its lowest level in six years, whereas public sector wage growth remained very strong at 6.1%. In other words, a single headline earnings figure is averaging two economies that are moving in opposite directions, which blunts its value as a policy signal. The result is a Bank of England with no clean case for tightening and no obvious trigger for cutting hard either, since "the economy isn't weakening enough to make any sort of aggressive rate cuts an obvious next step from the central bank". For sterling, that leaves the next consumer price index release carrying more weight than the labor data just delivered.
From detailed guides on how to trade major assets to quarterly market outlooks and special reports, we offer FREE access to the articles you need to successfully implement "global macro" style trading!
Sign Up
--- Written by Frédéric Guétin, StoneX Media Producer
--- Expert: Fiona Cincotta, StoneX Senior Market Analyst
The subsidiaries of StoneX Group Inc. provide financial products and services, including, but not limited to, physical commodities, securities, clearing, global payments, risk management, asset management, foreign exchange, and exchange-traded and over-the-counter derivatives. These financial products and services are offered in accordance with the applicable laws in the jurisdictions in which they are provided and are subject to specific terms, conditions, and restrictions contained in the terms of business applicable to each such offering. Not all products and services are available in all countries. The products and services offered by the StoneX Group of companies involve risk of loss and may not be suitable for all investors. Full Disclaimer. This content is not intended for residents of any particular country, and the information herein is not advice nor a recommendation to trade nor does it constitute an offer or solicitation to buy or sell any financial product or service, by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Please refer to the Regulatory Disclosure section for entity-specific disclosures. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc. The information herein is provided for informational purposes only. This information is provided on an ‘as-is’ basis and may contain statements and opinions of the StoneX Group of companies as well as excerpts and/or information from public sources and third parties and no warranty, whether express or implied, is given as to its completeness or accuracy. Each company within the StoneX Group of companies (on its own behalf and on behalf of its directors, employees and agents) disclaims any and all liability as well as any third-party claim that may arise from the accuracy and/or completeness of the information detailed herein, as well as the use of or reliance on this information by the recipient, any member of its group or any third party.
© 2026 StoneX Group Inc. all rights reserved.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
The UK labor market is weakening across hiring, vacancies and payrolls, yet average earnings are still running warm enough to complicate the easing story. The split between private and public sector pay is what leaves the Bank of England without a clean signal in either direction.
Commodity inflation has moved from a temporary input into a structural one in sovereign bond pricing, and the U.S. Treasury curve is showing exactly where. The oil correlation now sits at the 10 year point rather than the two year, which changes what an inflation print is actually worth.
Market commentary Interest Rates- Thought Leadership The Reserve Bank of Australia's updated forecasts lowered the bar for an upside inflation surprise while building more labor market weakness into the baseline. With wages, jobs, inflation, growth and spending data all landing before the next policy meeting, the risk sits with front end pricing that still treats a hike as remote.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve; our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
