Burnham inherits mixed bag labour market with employment stable but wages barely keeping afloat 18 August 2026 Andy Burnham’s government has inherited a mixed bag labour market, with levels of employment, unemployment and inactivity flat in June, and pay growth only just staying ahead of inflation, the Resolution Foundation said today (Tuesday) in response to the latest ONS data. The latest data on jobs shows no major change, with levels of payrolled employment down marginally and unemployment remaining at 4.9 per cent. Much of the official data also carried a major health warning this month as the ONS’ struggles to get accurate survey data continue. The Resolution Foundation calculated employment rate continued to fall and was at 75.1 per cent in Q2 (down from 75.3 per cent in Q1). The split between public and private sector wage growth continued, with the former rising by 6.1 per cent in cash terms (in part reflecting the timing of annual pay awards) and the latter rising by just 2.8 per cent – marginally ahead of CPI inflation (2.6 per cent). With inflation expected to rise to over 3 per cent in the second half of the year, the risk of a return to widespread real wage falls remains high, the Foundation says. In fact, in real terms, regular average weekly pay in the private sector is lower in June than it was last October. Louise Murphy, Senior Economist at the Resolution Foundation, said: “Britain’s early summer of decent economic growth hasn’t translated into more jobs and stronger pay. Unemployment continues to hover around five per cent, while wages in the private sector are barely keeping pace with price rises. “The UK will need many more months of decent growth to get job creation restarted. We’ll also need a rosier outlook for inflation – with future rises largely being driven by events in the Middle East – if we’re to avoid widespread real wage falls later this year.”
