United Kingdom hospitality and retail sectors lose 150,000 jobs

The British labor market is experiencing a cooling trend, with the hospitality and retail sectors losing a combined 150,000 payroll jobs over the past year. According to calculations by the Learning and Work Institute based on Office for National Statistics (ONS) data, total payroll employment in the United Kingdom fell by 26,000 in August, reaching 30.2 million. This represents a decrease of 145,000 employees compared to August 2025.

Job vacancies have also declined, dropping by 8,000 between June and August to a total of 702,000. This marks the lowest level since 2021 when including the pandemic period; excluding pandemic years, vacancy levels are comparable to those seen in late 2014. The ONS noted that small businesses are slowing recruitment due to rising labor costs.

Regarding wages, annual regular salary growth remained at 3.5% between May and July 2026. When including bonuses, the increase was 3.9%. However, real wage growth remains low, at 0.6% when measured by the CPIH and 0.8% using the CPI, as increases barely outpace inflation.