Public sector keeps growing amid bumper pay hikes - but private wages rise at slowest pace in more than five years as jobs market stutters

By JAMES TAPSFIELD, UK POLITICAL EDITOR Published: 07:54, 18 June 2026 | Updated: 07:56, 18 June 2026 The differing fortunes of the public and private sectors were underlined today as the jobs market stutters. Official figures show the public sector continuing to grow, with central Government numbers reaching a new record high. Regular annual earnings growth was running at 5.1 per cent for state workers between February and April - well above inflation. But the equivalent number for the private sector was 2.9 per cent, the slowest pace in more than five years. Although unemployment dipped from 4.9 per cent to 5 per cent in the period, that reflected a rise in those classed as inactive. Vacancies fell again between March and May, and are 31,000 lower than the same quarter last year.   ONS Director of Economic Statistics Liz McKeown said: 'The labour market remained broadly stable in the latest quarter, with further softening evident in some measures. Payroll numbers continued to fall over this period, with new recruits at their lowest level in five years. However, overall employment was little changed, with some signs of workers moving into self‑employment. Regular annual earnings growth was running at 5.1 per cent for state workers between February and April. But the equivalent number for the private sector was 2.9 per cent Economic inactivity ticked up in the latest official figures Vacancies dipped again between March and May, and are 31,000 lower than the same quarter last year 'Vacancies also continued to fall, further suggesting that firms are becoming more cautious about taking on new staff. The decline has been most persistent among lower‑paying sectors and smaller employers, although the largest fall this quarter was in professional services. 'Meanwhile, regular wage growth in the private sector slowed to its lowest rate in five and a half years, though total earnings are growing faster because bonus payments in March and April are higher than a year ago, particularly in the financial sector.  'Public sector pay growth increased but is once again affected by the timing of pay awards varying this year.' Employment in the public sector was estimated at 6.19million in March 2026, an increase of 2,000 from December and 37,000 from a year earlier. Central government numbers reached a record high of 4.07million, up 6,000 from December and 46,000 from March 2025. That was partly due to some local authority schools becoming academies. The Civil Service employed 558,000 people as of March, rising 3,000 from December and 8,000 from the year before. Employment in the NHS was up 6,000 year-on-year. Work and Pensions Secretary Pat McFadden said: 'This month's figures show that there are 400,000 more people in work than this time last year, but we know ongoing instability in the Middle East is causing uncertainty in our labour market. Although unemployment dipped from 4.9 per cent to 5 per cent in the period, that appears to reflect a rise in those classed as inactive Numbers on company payrolls - the most up-to-date figures issued by the ONS - have been falling off, although there was a small rise in the flash estimate for May  'We have the right economic plan for growth and stability in a volatile world – and we are taking action to create opportunity and make sure that no one is left behind. 'We are pushing ahead with the biggest youth employment reforms in a generation to create almost a million opportunities for young people, boosting skills through our Youth Guarantee backed by a £2.5billion investment and supporting 300,000 disabled people through our Connect to Work programme to futureproof our workforce to help more people into work.' But shadow business secretary Andrew Griffith said: 'These figures disguise the fact that many people have fallen out of the workforce and are adding to the ever greater ranks of sicknote Britain where being on 'Benefits Street' is better than a hard day's graft. We need to create an economy that encourages people back into the workforce.'  No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards. By posting your comment you agree to our house rules. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook. You can choose on each post whether you would like it to be posted to Facebook. Your details from Facebook will be used to provide you with tailored content, marketing and ads in line with our Privacy Policy.