Average wage growth remained at 5%, the unemployment rate was unmoved at 4.7% and an estimated drop in people on payrolls – down 8,000 between June and July – signalled a “very gradual cooling”, according to former Bank of England policymaker Andrew Sentence.

He pointed out that there are more than 30 million people on employer payrolls in the UK.

Ashley Webb, UK economist for Capital Economics, said the “modest fall” in payroll data “suggests that the fallout in the jobs market from the rise in business taxes and the minimum wage” is calming down.

In April, the National Living Wage rose from £11.44 to £12.21.

At the same time, National Insurance Contribution by employers rose from 13.5% to 15% while the salary threshold triggering payment by firm was lowered from £9,100 a year to £5,000.

Job vacancies were at their lowest level since the three months to April 2021, when the UK was dealing with the effects of the Covid pandemic.

Outside the pandemic, the last time that vacancies were lower was in the three months to January 2015.

However, although the number of job openings fell, it did not feed through to a rise in the unemployment rate, Mr Webb said.

He added that firms giving notice of redundancies was “relatively subdued” in July.

Monica George Michail, associate economist at the National Institute of Economic and Social Research, said the fall in jobs vacancies would be likely to contribute to slowing wage growth.

This is one the economic indicators the Bank of England looks at when making decisions on altering interest rates as it can fuel or cool the rate of inflation.

The Bank’s inflation target is 2% but the pace of price rises have grown in recent months, due to higher food and energy costs.

Ms Michail predicted that the Bank would cut interest rates one more time this year, forecasting that borrowing costs will fall from 4% to 3.75% in November.