DWF comments on latest Scottish labour market statistics

Ann Frances Cooney, employment expert and partner at DWF, has commented on the latest labour market figures in Scotland. I have placed the commentary below and attached an image of Ann Frances for your use.

Ann Frances Cooney says: “The latest figures suggest a mixed picture for Scotland’s labour market. While economic inactivity has fallen over the past year, unemployment has increased and employment has edged down, indicating that labour market conditions remain under pressure.

The headline figures for the period show the employment rate in Scotland was estimated at 73.7%, down 0.8% over the year. By way of comparison Scotland’s employment rate was below the UK rate of 75.1%. The estimated unemployment rate in Scotland was 5.1%, up 1.7% over the year. Scotland’s unemployment rate was above the UK rate of 4.9%. The latest data suggests Scotland’s labour market remains in a period of adjustment, with higher unemployment and lower employment over the past year indicating pressures that appear more pronounced than those seen across the wider UK labour market.

The early seasonally adjusted estimates for August 2026 from HMRC Pay As You Earn Real Time Information indicate that median monthly pay for payrolled employees in Scotland was £2,686, an increase of 3.6% in nominal terms compared with August 2025. The latest pay figures underline the continuing challenge for employers, who must navigate rising employment costs while seeking to attract and retain talent in a competitive labour market.

Looking ahead, employers continue to navigate a challenging operating environment. Inflation increased to 2.9% in the year to July 2026, driven largely by higher energy costs, highlighting that cost pressures remain a significant consideration despite signs of resilience elsewhere in the economy. Alongside these economic pressures, employers are preparing for significant employment law reforms taking effect from 30 October 2026, including strengthened trade union rights of access to workplaces, giving unions new opportunities to engage with, recruit and organise workers. As organisations adapt to these developments, many are likely to maintain a cautious and carefully targeted approach to recruitment, workforce planning and reward decisions, while giving greater attention to employee and trade union engagement strategies.”