Jessica O'ConnorThe number of payrolled employees in the UK continued to decline, according to the latest Labour Market Overview from the Office for National Statistics (ONS).
Estimates showed that payrolled employment fell by 117,000 (0.4%) between September 2024 and September 2025, with a decrease of 32,000 (0.1%) between August and September 2025.
Looking at the July to September 2025 period, payrolled employees were down by 109,000 (0.4%) over the year and by 26,000 (0.1%) over the quarter.
Early estimates for October 2025 suggested a further decrease of 180,000 (0.6%) on the year, and 32,000 (0.1%) on the month, bringing the provisional total to 30.3 million.
The ONS noted that these figures may be revised as more data becomes available.
The UK employment rate for people aged 16 to 64 stood at 75.0% in July to September 2025.
This represented a fall on the previous quarter but remains above levels recorded a year earlier.
Unemployment rose to 5.0% in the same period, up on the quarter and the year.
Economic inactivity among those aged 16 to 64 was broadly stable at 21.0%, though the rate remains lower than a year ago.
The Claimant Count increased month-on-month in October 2025, reaching an estimated 1.696 million.
However, the figure is lower than the same month last year.
UK vacancies were broadly unchanged, with early estimates pointing to a slight increase of 2,000 (0.2%) to 723,000 in the August to October 2025 period.
Wage growth remained positive. Annual growth in regular earnings (excluding bonuses) was 4.6%, and total pay (including bonuses) rose 4.8% in July to September 2025.
Regular pay growth stood at 4.2% in the private sector and 6.6% in the public sector, though the ONS notes public sector growth is influenced by pay awards being implemented earlier this year.
In real terms, adjusted for CPIH inflation, regular pay increased by 0.5% and total pay by 0.7%.
When adjusted using CPI, real regular pay grew by 0.8% and total pay by 1.0%.
An estimated 39,000 working days were lost to labour disputes in September 2025.
Kevin Fitzgerald, UK MD at Employment Hero, said: “Today’s ONS figures highlight the pressure uncertainty around November’s Autumn Budget – alongside persistent inflation – is putting on businesses. With speculation over potential tax rises, many employers are understandably playing it safe when it comes to hiring. But those still hiring are the small businesses willing to take a risk rather than stall growth.
“Employment Hero’s real-time data shows SME employment grew 2.3% in October. That’s resilience in action. We often see sharper shifts in our data because smaller businesses are more susceptible to economic changes – they feel the impact first and recover faster when confidence returns.
“The Autumn Budget is a chance to learn from past mistakes. Our data shows the impact last year’s employment taxes had on small businesses, causing an immediate slowdown in hiring. Now that confidence is returning, we can’t afford to repeat the same pattern.
“If the Government wants to continue job growth and control inflation, it can’t keep penalising the very businesses that power our economy. The way to get Britain working again is to back small businesses, not burden them.”
