As of September 2025, we’ve reviewed the latest labour market data for the UK, covering the period from April 2025 to June 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 6,000 (0.0%) between June 2025 and July 2025. It also fell by 142,000 (0.5%) between July 2024 and July 2025.

The total number of payrolled employees in the UK decreased by 51,000 (0.2%) over the quarter and fell by 125,000 (0.4%) over the year, looking at May to July 2025.

The early estimate for August 2025 showed a decrease of 8,000 (0.0%) on the month, and a decrease of 127,000 (0.4%) on the year to 30.3 million.

Employment and Unemployment

The UK employment rate for people aged 16 to 64 years stood at 75.2% for May to July 2025. This is above estimates of a year ago, and up in the latest quarter.

The unemployment rate for those aged 16 and over was estimated at 4.7% in May to July 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 21.1%, showing a decrease compared to both last year and the previous quarter.

Vacancies and Claimant Count

Job vacancies in the UK from June to August 2025 were estimated at 728,000, showing a fall of 10,000 (1.4%) on the quarter. This marked the 38th 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 1.686 million.

Workforce Jobs and Public Sector Employment

The estimated number of workforce jobs in the UK was 36.8 million in June 2025, showing a decrease of 182,000 (0.5%) from March 2025, but growth from the level of a year ago, with an increase of 139,000 (0.4%).

Employment in the public sector in June 2025 was estimated at 6.17 million. Compared to March 2025, this is an increase of 17,000 (0.3%), and also an increase of 75,000 (1.2%) compared with June 2024.

Earnings Growth

Annual growth in employees’ average regular earnings for regular earnings (excluding bonuses) was 4.8%, and total earnings (including bonuses) was 4.7% in May to July 2025.

When adjusted for inflation, regular pay was 0.7% and total pay was 0.5% in May to July 2025, based on the Consumer Prices Index including owner occupiers’ housing costs (CPIH)

Labour Disputes

Labour disputes resulted in an estimated 83,000 working days lost in July 2025. The majority of strikes were in the health and social work sector.

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The UK labour market continues to cool. Employment edged up to 75.2% while inactivity fell to 21.1%, but payrolled employees dropped by 125,000 year-on-year and unemployment rose to 4.7%. Vacancies fell again to 728,000, the 38th consecutive decline, and the Claimant Count reached 1.686 million.

Earnings growth remained solid at 4.8% (regular) and 4.7% (total), though inflation reduced real gains. Industrial action caused 83,000 lost working days in July. Overall, weaker hiring and continued disputes highlight the need for flexible workforce planning and competitive pay strategies.

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