As of May 2025, we’ve reviewed the latest labour market data for the UK, covering the period from January 2025 to March 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.

---

Key Findings

Payrolled Employees

Estimates of UK payrolled employees fell by 47,000 (0.2%) between February 2025 and March 2025. It also fell by 63,000 (0.2%) between March 2024 and March 2025.

The total number of payrolled employees in the UK decreased by 53,000 (0.2%) over the quarter and fell by 4,000 (0.0%) over the year, looking at January to March 2025.

The early estimate for April 2025 showed a decrease of 33,000 (0.1%) on the month, and a decrease of 106,000 (0.3%) on the year to 30.3 million.

Employment and Unemployment

The UK employment rate for people aged 16 to 64 years stood at 75.0% for January to March 2025. This is above estimates of a year ago, but largely unchanged in the latest quarter.

The unemployment rate for those aged 16 and over was estimated at 4.5% in January to March 2025, above estimates of a year ago and up on the quarter.

The economic inactivity rate, which refers to individuals aged 16 to 64 not in work or actively seeking work, was 21.4%, showing a decrease compared to both last year and the previous quarter.

Vacancies and Claimant Count

Job vacancies in the UK from February to April 2025 were estimated at 761,000, showing a fall of 42,000 on the quarter. This marked the 34th consecutive quarterly decline, seeing quarterly falls in 13 of the 18 industry sectors.

The Claimant Count, which tracks the number of people claiming unemployment benefits, slightly rose to 1.726 million in April 2025, showing an increase both month-on-month and year-on-year.

Earnings Growth

Annual growth in employees’ average regular earnings excluding bonuses was 5.6% in January to March 2025, with annual growth in total earnings including bonuses being 5.5%.

When adjusted for inflation, regular pay was 1.8% and total pay was 1.7% in January to March 2025, based on the Consumer Prices Index including owner occupiers’ housing costs (CPIH)

Labour Disputes

Labour disputes resulted in an estimated 55,000 working days lost in March 2025.

---

The latest labour market data presents a nuanced outlook. While the employment rate for those aged 16 to 64 held steady at 75.0%, an improvement on the previous year, the unemployment rate rose to 4.5%, and the number of payrolled employees saw a quarter-on-quarter decline of 53,000. Economic inactivity dropped to 21.4%, suggesting some return to the labour force, yet job vacancies continued their downward trend, falling for the 34th consecutive quarter to 761,000. The Claimant Count also edged up to 1.726 million. On a more positive note, average regular earnings rose by 5.6%, with inflation-adjusted growth of 1.8%. These insights provide a critical foundation for shaping our workforce strategy, highlighting the importance of staying agile in a cooling labour market, investing in talent attraction, and maintaining competitive pay to retain key skills.

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