Marvin OnumonuThe latest Office for National Statistics (ONS) Labour Market data showed UK payrolled employees fell by 149,000 from October 2024 to October 2025, with a further decrease of 22,000 between September and October 2025.
In August to October 2025, payrolled employees dropped by 113,000 over the year and by 24,000 over the quarter.
The early estimate for November 2025 was down 171,000 on the year and 38,000 on the month, sitting at 30.3 million.
The employment rate for people aged 16 to 64 years was 74.9% in August to October 2025, down on the quarter and unchanged from last year.
The unemployment rate for those aged 16 and over stood at 5.1%, up in the quarter and above last year’s estimate.
Economic inactivity for 16 to 64-year-olds was 21.0%, down on the quarter and below last year.
The Claimant Count for November 2025 increased month-on-month but was lower than a year ago, at 1.683 million.
The number of vacancies remained steady, with a slight fall of 2,000 to 729,000 in September to November 2025.
Workforce jobs totalled 36.6 million in September 2025, down 116,000 since June, including a drop of 120,000 self-employment jobs.
Over the year, workforce jobs fell by 115,000, mainly due to a 201,000 fall in self-employment.
Public sector employment was 6.18 million in September 2025, up 7,000 on the quarter and 62,000 on the year.
Regular earnings grew by 4.6% and total earnings by 4.7%.
Regular pay growth was 3.9% in the private sector and 7.6% in the public sector, with the higher public figure affected by earlier pay rises in 2025.
Real terms annual pay growth, accounting for inflation, was 0.5% for regular pay and 0.6% for total pay (CPIH measure), and 0.9% and 1.0% using CPI.
There were 39,000 working days lost to labour disputes in October 2025.
REACTION:
Kevin Fitzgerald, UK managing director at Employment Hero:
“Today’s ONS employment data is the latest demonstration of the UK’s tightening labour market.
“A decline in the employment rate aligns with Employment Hero’s real-time proprietary data, which shows that employment growth is losing momentum.
“Our real-time data from businesses around the UK employment growth has slowed significantly, falling from 7.6% in November 2024 to 2.0% in November 2025.
“Sadly, the small increase in vacancy numbers recorded in October hasn’t been maintained.
“The job remains incredibly tough, and many jobseekers feel stuck – our recent survey found that 42% of UK workers searched for a new job in 2025.
“The lack of opportunities, combined with the continued rise in inflation, is putting pressure on employers who are also contending with rising costs, such as last month’s minimum wage increase.
“Looking forward, our shows that smaller businesses are more susceptible to economic changes, so creating favourable conditions to encourage further hiring will be crucial to unlocking the full potential of the labour market.”
Rob Morgan, chief investment analyst at Charles Stanley:
“The UK labour market is curling up for a long winter, chilled by weak growth, rising employment costs, and deep business uncertainty.
“Employers are pulling back as unemployment climbed to 5.1% in the three months to October – the highest since 2021 – while payrolled employment continues to shrink.
“In hospitality, many firms are hanging on, a warning sign that the freeze could deepen.
“Jobs are scarce for those out of work, yet pay remains relatively resilient for those still employed.
“Average earnings rose 4.6% in the three months to October (down from 5.9% earlier this year), while total pay including bonuses hit 4.7%. Overall, wage growth is cooling, slowly aligning with the broader slowdown.
“Overall, the employment market paints a worrying picture, reflective of caution among employers and an economy decelerating markedly into the year-end.
“October’s GDP growth marked back-to-back monthly falls of -0.1% month on month, raising the prospect that the UK economy could see its first quarterly contraction since Labour return to government.
“Possibly there’s some temporary factors partly to blame, and a pre-Christmas rebound could turn things around.
“Now the Budget is out of the way there’s a bit more certainty for employers and the opportunity for a clearer view.
“Yet the heavy load of tax and employment regulation still runs counter to the goal of a flexible, vibrant jobs market that could reignite growth.
“The chill in jobs strengthens the case for rate cuts. Inflation is fading, and Budget measures should overall ease rather than stoke prices.
“While the MPC remains split, a Bank of England base rate cut on Thursday looks all but certain, with policymakers – governor included – increasingly alarmed by the economic slowdown.”
James Cockett, senior labour market economist for the CIPD:
“Unemployment has risen again this month, and the data shows it’s younger people who are being hardest hit.
“There was little in the Budget to encourage employers to invest in young people. Instead, there was a significant uplift to the youth rates, set to come into effect from April next year, further raising the costs of employing young people.
“It’s clear the Government needs to take stronger action to support young people in securing valuable training and employment opportunities.
“While it was positive to see the government announce funding to support apprenticeship starts for under-25s in smaller businesses in the Budget, it needs to go further.
“It can do this by introducing an Apprenticeship Guarantee for 16 to 24-year-olds, which is supported by many employers.
“Looking ahead to 2026, with redundancies soaring to their highest rate since early 2021 and real wage growth stagnating, it’s clear the Government needs to develop a meaningful plan to boost growth.
“This means working in partnership with employers to boost the investment in skills and technology adoption that’s needed across the economy to improve productivity and living standards.
“The Government should also continue to commit to an ongoing tripartite process on key measures in the Employment Rights Bill still to be decided in secondary legislation, to ensure they don’t further hold back hiring.
“Some measures proposed in the bill could act as a weight on employers who have genuine concerns on how these changes will affect their business.
“While there have been some positive developments around unfair dismissal there’s still a need for continued consultation, and compromise, to ensure the bill doesn’t reduce employment opportunities.”
