‘Fat Cat Day’ distracts us from the biggest employment issue of 2026

‘Fat Cat Day’ which falls every year in early January, returned on 6 January this year. But it’s a huge distraction from the very real emerging issue of unemployment, editor Edmund Greaves writes.

So-called ‘Fat Cat Day’ – is the annual day, which marks the point at which the average earnings of a FTSE 100 company chief executive will pass the average annual earnings of a worker in Britain. This year it arrived dutifully on 6 January. 

The numbers associated with this are typically mind-boggling but bely some important points around the disparity.

It goes under-remarked that UK CEO pay actually lags competitors such as the US by a wide margin, although thanks to pro-business reforms (such as scrapping the bonus cap) this pay is starting to catch up. 

It is also of note that 2025 was rather a good year for FTSE 100 CEOs, if shareholder value was their goal. At the time of writing the FTSE 100 has returned 21% over 12 months – an astonishingly good year for an index that routinely gets denigrated for its lack of whizzy tech firms. 

By way of comparison, the S&P 500 has returned a paltry 17%. The former has a current yield of 3.02% vs 1.13% for the latter – meaning even more handsome returns for lovers of big-ticket British shares. So much for American exceptionalism! Those CEOs are earning their supper, it seems. 

Added to that, the average worker’s earnings have been rising ahead of inflation for some time now. Indeed, real pay has grown faster than inflation for more than two years – it was last behind inflation in May 2023. This is the longest period of sustained real average wage growth since 2016 (and could yet continue if disinflation persists). 

But bigger than all this is what I think is perhaps going to be the biggest labour market story of 2026 – rising unemployment.

Employment has been stubbornly resilient for a long time now. This is both good and bad. Good because people having jobs is generally a net positive. Bad because of a lot of the low quality/pay work out there. 

Unemployment is only a positive if you are the most ‘glass half full person’ in the room. At the margins, yes some people who find themselves without work will start those businesses they’ve always dreamed of. For millions of others though, this is not the reality of life in modern Britain.

Rising unemployment will condemn more people to dependency, some of whom once in never leave it. For many others, particularly the young, it may merely encourage more political radicalism to layer on top of what was already rising in 2025. 

The labour market is cooling, that much is evident. Now that the Government’s package of labour market reforms, the Employment Rights Act 2025, is now law – we can only guess at what it will do to employment in 2026, but there’s a good bet it will harm it.

It remains to be seen. But it is more important at the moment to pay attention to than ‘Fat Cat Day’, to my mind at least.