Marvin OnumonuOffice for National Statistics (ONS) latest Labour Market data showed payrolled employees in the UK fell by 142,000 (0.5%) between July 2024 and July 2025, and by 6,000 (0.0%) from June to July 2025.
Between May and July 2025, payrolled employees dropped by 125,000 (0.4%) over the year and by 51,000 (0.2%) over the quarter.
The early estimate for August 2025 was down 127,000 (0.4%) on the year and by 8,000 (0.0%) on the month, at 30.3 million.
Data also showed that the employment rate for people aged 16 to 64 was 75.2% in May to July 2025, up from the previous quarter and higher than a year ago.
The unemployment rate for people aged 16 and over was 4.7%, also up on the quarter and higher than last year.
Economic inactivity for those aged 16 to 64 was 21.1%, down on the quarter and lower than a year ago.
The claimant count for August 2025 rose on the month but was down on the year to 1.686 million.
The number of vacancies dropped by 10,000 (1.4%) in the quarter to 728,000 in June to August 2025, marking the 38th consecutive period of falling vacancies.
Vacancies fell in nine of the 18 industry sectors.
Workforce jobs stood at 36.8 million in June 2025, down 182,000 (0.5%) from March 2025 but up 139,000 (0.4%) compared to a year ago.
Public sector employment was estimated at 6.17 million in June 2025, up 17,000 (0.3%) on the quarter and by 75,000 (1.2%) on the year.
Average earnings in Great Britain were up by 4.8% for regular pay (excluding bonuses) and 4.7% for total pay (including bonuses) in May to July 2025.
Regular earnings growth was 5.6% for the public sector and 4.7% for the private sector.
In real terms, using consumer prices index including owner occupiers’ housing costs (CPIH), regular pay rose by 0.7% and total pay by 0.5%.
Using consumer prices index (CPI), regular pay increased by 1.2% and total pay by 1.0%.
There were an estimated 83,000 working days lost due to labour disputes in July 2025, mostly in the health and social work sector.
REACTION:
Steven Cameron, pensions director at Aegon UK:
“Today’s announcement that year-on-year earnings growth for May to July stands at 4.7% is the greatest indication yet of the increase state pensioners may receive next April.
“Each April, the state pension increases in line with the triple lock – whichever is highest out of earnings growth for the preceding May to July period, consumer inflation in the preceding September, or a fixed minimum of 2.5%.
“Given that we now know earnings growth at 4.7% is higher than the 2.5% minimum, all eyes turn towards September’s inflation rate, which should be announced on 22nd October.
“Inflation has been increasing, albeit gradually, over the past few months, most recently standing at 3.8%. In August, the Bank of England predicted inflation would peak in September at 4%. Therefore, inflation would have to rise sharply to exceed the earnings figure.
“When earnings growth exceeds inflation, pensioners receive an increase based on earnings which is good news for them as it improves their purchasing power. If inflation exceeds earnings growth, this determines the triple lock increase, and purchasing power is protected, albeit not improved.”
Michael Stull, managing director at ManpowerGroup UK:
“With fewer jobs as the labour market continues to cool, today’s data confirms what we’ve been seeing elsewhere: this is not a regular boom-bust cycle but a slow, steady march towards a stagnant labour market.
“Rising costs, economic and political uncertainty in conjunction with leaps in technology are causing employers to pull back on hiring. That said, there are still opportunities for talent to flourish in areas such as AI, tech, and data, where employers continue to invest in new technologies and tools for those all-important productivity gains.
“Against this backdrop, the Government is attempting to strike the right balance through its efforts to strengthen worker protections. But the potential for further cost to businesses is leading to growing scrutiny of its Employment Rights Bill as it moves through Parliament.
“Regardless of the differing viewpoints, what we need now is clarity and action: Clarity for employers to make decisions, plan for changing costs and adjust accordingly; and, pragmatic action on policies that can support workers to secure employment, retain and progress through roles.“
Kevin Fitzgerald, UK MD at Employment Hero:
“Vacancy numbers have now been falling continually for more than three years. As a result, the labour market has become increasingly competitive, with jobseekers finding it harder to land new opportunities. Data from our Annual Jobs Report shows that 51% of UK employees aren’t confident they could find a new job within three months.
“Part time roles have been hit particularly hard, with Employment Hero data showing a 2.8% decrease in growth over August. This tells us that businesses are adapting their operating models, potentially absorbing extra work rather than hiring part time support.
“At the same time, wage growth continues to put pressure on businesses: our data shows a 1.1% month-on-month increase in August.
“The figures underline the pressure that April’s National Insurance hike, combined with persistent inflation, have placed on businesses.
“Employers have naturally been forced to adapt, and are playing it safe when it comes to hiring. In the lead up to November’s Autumn Budget, there has already been significant speculation around potential tax changes, reinforcing the need for certainty.”
