Marvin OnumonuThe employment rate for people aged 16 to 64 was 75.0% in January to March 2025, which was above the rate a year ago but little changed in the quarter, according to the latest Office for National Statistics (ONS) labour market data.
The unemployment rate for people aged 16 and over was 4.5%, up on the year and higher in the latest quarter.
UK payrolled employees fell by 47,000 (0.2%) between February and March 2025 and dropped by 63,000 (0.2%) between March 2024 and March 2025.
Data also revealed that over the quarter from January to March 2025, payrolled employees fell by 53,000 (0.2%) and by 4,000 (0.0%) over the year.
An early provisional estimate for April 2025 showed a fall of 33,000 (0.1%) in the month and 106,000 (0.3%) over the year, taking the total down to 30.3 million.
Labour Force Survey (LFS) estimates for January to March 2025 included the full effect of recent data collection changes, but there was still volatility in the figures from mid-2023 and throughout 2024.
The economic inactivity rate for people aged 16 to 64 was 21.4% in January to March 2025, below a year ago and down in the quarter.
Meanwhile, the UK Claimant Count for April 2025 increased on both the month and year to 1.726 million.
The number of job vacancies fell by 42,000 over the quarter, to 761,000 in February to April 2025 – this was the 34th consecutive quarterly fall.
Vacancies were 34,000 below the level seen in January to March 2020.
The annual growth in employees’ average regular earnings excluding bonuses was 5.6% in January to March 2025, while total earnings including bonuses grew by 5.5%.
In real terms, adjusted for the Consumer Prices Index including owner-occupiers’ housing costs (CPIH), regular pay grew by 1.8% and total pay by 1.7%.
Using the CPI, annual growth in real terms was 2.6% for both regular and total pay in January to March 2025.
There were an estimated 55,000 working days lost because of labour disputes in March 2025.
Reaction:
Kevin Brown, savings specialist at Scottish Friendly:
“On the surface, ONS wage data continues to give UK households some reason for cheer. Pay rises are still climbing ahead of inflation, in a boost to household disposable income for many.
“Wages continue to defy the relatively gloomy prognosis for the UK economy, but the rate is slowing relative to inflation.
“The data does not yet capture the impact of either the National Insurance rises and living wage increase, which started in April, nor the drama created by US tariffs and their impact here in the UK.
“There are signs that wage growth will slow further from here. Business confidence is at its lowest level since the Covid pandemic.
“Private sector headcount growth has slowed to a snail’s pace, while headcount is expected to fall among public sector workers.
“Equally, ONS data shows household disposable income remains stagnant since 2008 as cost of living increases have continued to all but wipe out any pay rises.
“Against this backdrop, households are unlikely to be feeling much better off in spite of some decent wage hikes.”
Lindsay James, investment strategist at Quilter:
“The LFS has been under warranted scrutiny for some time, as concerns over its accuracy have resulted in a relatively unreliable picture of the UK jobs landscape.
“In its latest update, the ONS has indicated that the quality of the LFS is improving, so with hope the monthly data will become increasingly accurate as it is further developed.
“Despite its limitations, it remains the sole source of the UK’s labour market data and will therefore still be relied upon, albeit with caution, by the Bank of England and policy makers.
“While the labour market has been surprisingly resilient thus far, this latest print may prove to be the start of the expected slowdown[…]
“Inflation is still expected to climb to 3.5% in Q3 before falling, but one scenario highlighted by the recent Bank of England MPC report suggested this risked second round price effects which could see high wage growth becoming more persistent.
“However, members of the Monetary Policy Committee have still pinned their hopes on a significant slowdown in wage growth throughout the year, so we may eventually see the two draw level.
“Recent GDP figures have been better than expected, though we await the latest update on Thursday and the UK-US trade deal will have given businesses more certainty.
“However, with the changes to national insurance now bedded in and the full details of the trade deal still to be ironed out, businesses are still facing challenges, and we could see the labour market weaken further in the coming months as a result.”
