Data from the Office for National Statistics (ONS) shows the unemployment rate for people aged 16 and over was 4.3% between June to August this year.

This was 0.4% down on the previous quarter and below the UK wide average of 4.7%.

There were 119,000 people aged 16 and over out of work in Scotland in the latest quarter, according to the figures.

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The employment rate for people aged 16 to 64 was 74%, which was 0.4% down on the previous quarter.

The figures show 2.631 million people aged 16 and over were in employment in Scotland in the last quarter.

The ONS’s data also showed a boost for average wage growth across the UK workforce.

Average regular earnings growth rose to 3.7% in the three months to August, from 3.5% growth in the three months to July.

Pay continues to outstrip inflation, rising by 0.8% after taking Consumer Prices Index (CPI) inflation into account.

However, total earnings growth, which includes bonuses, fell to 3.7% in the three months to August, which was the lowest rate in nearly six years.

Furthermore, the latest dataset shows that the number of job vacancies advertised by employers continued to shrink, with smaller firms particularly pulling back on hiring.

Vacancies fell by 21,000 to a fresh five-year low of 691,000 in the three months to September, according to the ONS’s estimates.

This marked the biggest decline since the start of the year.

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ONS deputy director of labour market statistics, David Freeman, said: “While the labour market remains broadly flat in 2026, data from the latest quarter shows the employment rate edging up and a small drop in unemployment.

“The number of workers on payroll remains slightly down over the same period, though data for the most recent month suggests that might be starting to level off.

“The number of vacancies has seen its largest fall since the start of the year, concentrated mainly within smaller businesses, which cite increased labour costs as a key factor.

“Regular wage growth remained relatively stable, though total pay – including bonuses – has eased to its lowest rate in nearly six years.”

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Experts said the latest data reinforces expectations that the Bank of England could hike interest rates in November.

Thomas Pugh, chief economist at RSM UK, said: “For the Bank of England, the stronger economy and stabilising labour market means there is no longer a trade-off between low growth and high inflation.

“This morning’s data means an interest rate hike in November now looks exceedingly likely and will probably be followed by at least one more next year.”