As of April 2025, we’ve reviewed the latest labour market data for the UK, covering the period from December 2024 to February 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 fell by 8,000 (0.0%) between January 2024 and February 2025. However, it rose by 35,000 (0.1%) between February 2024 and February 2025.

The total number of payrolled employees in the UK decreased by 21,000 (0.1%) over the quarter but increased by 50,000 (0.2%) over the year, looking at December 2024 to February 2025.

The early estimate for March 2025 showed a decrease of 78,000 (0.3%) on the month, and a decrease of 70,000 (0.2%) on the year to 30.3 million.

Employment and Unemployment

The UK employment rate for people aged 16 to 64 years stood at 75.1% for December 2024 to February 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 December 2024 to February 2025, above estimates of a year ago but largely unchanged on the quarter.

The economic inactivity rate, which refers to individuals aged 16 to 64 not in work or actively seeking work, was 21.%, showing a decrease compared to both last year and the previous quarter.

Vacancies and Claimant Count

Job vacancies in the UK from January 2025 to March 2025 were estimated at 781,000. This marked the 33rd consecutive quarterly decline. This is also the first time since March to May 2021 that they were below (COVID-19) pre-pandemic levels.

The Claimant Count, which tracks the number of people claiming unemployment benefits, slightly rose to 1.766 million in March 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 December 2024 and February 2025, with annual growth in total earnings including bonuses being 5.6%.

When adjusted for inflation, regular pay was 2.1% and total pay was 1.9% in December 2024 to February 2025, based on the Consumer Prices Index including owner occupiers’ housing costs (CPIH)

Labour Disputes

Labour disputes resulted in an estimated 52,000 working days lost in February 2025.

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The latest labour market data shows a mixed picture. Employment is up slightly to 75.1%, and fewer people are inactive, which is a positive sign. However, vacancies continue to fall, and the number of people claiming unemployment benefits has gone up. Pay is growing steadily, with regular earnings rising by 5.9% over the year and still increasing when adjusted for inflation. These trends help us stay informed and plan better for recruitment, pay, and workforce decisions.

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