As of March 2025, we’ve reviewed the latest labour market data for the UK, covering the period from November 2024 to January 2025. This report from the Office for National Statistics (ONS) sheds light on several important indicators, including trends in payrolled employees, employment, unemployment, economic inactivity, vacancies, earnings, and labour disputes. Understanding these trends is crucial for us as a business, as they help us make informed decisions about workforce planning, compensation strategies, and recruitment priorities. By staying updated on these key figures, we can better anticipate changes in the labour market and respond effectively.

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Key Findings

Payrolled Employees

Estimates of UK payrolled employees rose by 9,000 (0.0%) between December 2024 and January 2025. It also rose by 44,000 (0.1%) between January 2024 and January 2025.

The total number of payrolled employees in the UK decreased slightly by 9,000 (0.0%) over the quarter but increased by 72,000 (0.2%) over the year, looking at November 2024 to January 2025.

The early estimate for February 2025 showed a increase of 21,000 (0.1%) on the month, and an increase of 66,000 (0.2%) on the year to 30.4 million.

Employment and Unemployment

The UK employment rate for people aged 16 to 64 years stood at 75.0% for November 2024 to January 2025. This is both above estimates of a year ago and an increase in the latest quarter.

The unemployment rate for those aged 16 and over was estimated at 4.4% in November 2024 to January 2025, up from the previous quarter and above of the same period a year ago.

The economic inactivity rate, which refers to individuals aged 16 to 64 not in work or actively seeking work, was 21.5%, showing a decrease compared to both last year and the previous quarter.

Vacancies and Claimant Count

Job vacancies in the UK in December 2024 to February 2025 were estimated at 816,000. Vacancies are broadly unchanged on the quarter and remain above (COVID-19) pre-pandemic levels.

The Claimant Count, which tracks the number of people claiming unemployment benefits, slightly rose to 1.775 million in January 2025, showing an increase both month-on-month and year-on-year.

Earnings Growth

Annual growth in employees’ average regular earnings excluding bonuses was 5.9% in November 2024 and January 2025, with annual growth in total earnings including bonuses being 5.8%.

When adjusted for inflation, regular pay was 2.2% and total pay was 2.1% in November 2024 to January 2025, based on the Consumer Prices Index including owner occupiers’ housing costs (CPIH)

Labour Disputes

Labour disputes resulted in an estimated 50,000 working days lost in January 2025.

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Looking at the labour market data for November 2024 to January 2025, we see both positive and challenging trends. While payrolled employment saw a small quarterly decline, it remained higher than the previous year. The employment rate increased in the latest quarter, and economic inactivity continued to decrease. However, unemployment rose to 4.4%. Job vacancies have remained broadly unchanged on the quarter but are still above pre-pandemic levels. The Claimant Count increased both month-on-month and year-on-year. Despite these shifts, earnings grew by 5.9% annually, with real wages rising after adjusting for inflation. Labour disputes led to 50,000 working days lost in January.

Source: Labour market overview, UK – Office for National Statistics