As of October 2025, we’ve reviewed the latest labour market data for the UK, covering the period from June 2025 to August 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 increased by 10,000 (0.0%) between July 2025 and August 2025. However, it fell by 93,000 (0.3%) between August 2024 and August 2025.

The total number of payrolled employees in the UK decreased by 31,000 (0.1%) over the quarter, looking at June to August 2025, and fell by 115,000 (0.4%) over the year.

The early estimate for September 2025 showed a decrease of 10,000 (0.0%) on the month, and a decrease of 100,000 (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 75.1% for June to August 2025. This is above estimates of a year ago, but down in the latest quarter.

The unemployment rate for those aged 16 and over was estimated at 4.8% in June to August 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%, below estimates of a year ago, but largely unchanged in the latest quarter.

Vacancies and Claimant Count

Job vacancies in the UK from July to September 2025 were estimated at 717,000, showing a fall of 9,000 (1.3%) on the quarter. This marked the 39th consecutive quarterly decline, seeing quarterly falls in 9 of the 18 industry sectors.

The Claimant Count, which tracks the number of people claiming unemployment benefits, increased on the month but decreased on the year to 1.692 million.

Earnings Growth

Annual growth in employees’ average regular earnings for regular earnings (excluding bonuses) was 4.7%, and total earnings (including bonuses) was 5% in June to August 2025.

When adjusted for inflation, regular pay was 0.6% and total pay was 0.8% in June to August 2025, based on the Consumer Prices Index including owner occupiers’ housing costs (CPIH)

Labour Disputes

Labour disputes resulted in an estimated 15,000 working days lost in August 2025.

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The UK labour market continues to cool. Employment fell slightly to 75.1%, unemployment rose to 4.8%, and inactivity stayed at 21%. Payrolled employees declined by 93,000 year-on-year, while vacancies dropped for the 39th straight period to 717,000. Earnings grew 4.7% (regular) and 5% (total), with modest real gains, and industrial action eased sharply.

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