UK employment dips as unemployment rises, ONS data shows
Payrolled employees fall year on year while unemployment edges up to 5.2%.
UK employment has declined over the past year, with the number of payrolled employees falling by 96,000 to January 2026, according to the latest data from the Office for National Statistics.
Early estimates suggest a further annual fall of 49,000 in February, although there was a small monthly increase of 20,000, taking the total to 30.3 million.
The unemployment rate rose to 5.2% in the three months to January 2026, while the employment rate increased slightly to 75.1% and economic inactivity fell to 20.7%.
Vacancies remained broadly flat, with a small decline of 6,000 to 721,000, reflecting a labour market that is stabilising after recent volatility.
Workforce jobs were estimated at 36.6 million in December 2025, down 266,000 year on year, driven largely by a 242,000 fall in self-employment roles.
Earnings growth remained positive but modest in real terms, with regular pay increasing by 3.8% and total pay by 3.9%, equating to real growth of 0.4% and 0.5% respectively when adjusted for inflation.
The data also showed the Claimant Count rose on the month to 1.692 million, although it remains lower than a year earlier.
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Kevin Fitzgerald, UK MD at Employment Hero:
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