October 2026

Executive summary

The labour market is broadly flat, with tentative signs of improvement in hiring. Learning and Work Institute described it as relatively flat on the day of the release. Resolution Foundation and Indeed both pointed to early signs of stabilisation. Unemployment fell to 4.7% in June to August, and the number of people on payrolls rose slightly in September.

Job openings are still falling. Vacancies dropped to 691,000 in July to September, the first time below 700,000 since early 2021 and the lowest outside the pandemic since 2014. The steepest fall was at the smallest employers, where ONS reports that labour costs are a reason some are not recruiting.

Recruiters report that permanent placements rose in September at their fastest rate in four years, though the rise was still small. Their measure of demand for staff kept falling, at the slowest pace in two years. In September we said demand for staff and permanent vacancies would both need to rise before we would say the market is recovering. Neither has yet.

Youth unemployment was lower in June to August than in the spring, at 15.6%. It is still a point higher than a year ago, with 54,000 more young people unemployed.

People joining us this month described reaching interview without an offer, and months of applications with no reply. Some believe automated screening is filtering them out. A survey published in September found that three in four recent job applicants did not know they may have a legal right to ask for a human review of an automated rejection.

The Budget on 28 October confirmed existing youth programmes and announced targeted support for apprenticeships, enterprise and adult learning. The larger decisions come after Milburn's final report, due next month, with the government's response promised before the end of the year. The Office for Budget Responsibility expects unemployment to rise to just above 5% by mid-2027. It says administrative data suggest employment weakness reflects fewer people entering work rather than more people leaving it.