As of July 2025, we’ve reviewed the latest labour market data for the UK, covering the period from March 2025 to May 2025. This report from the Office for National Statistics (ONS) sheds light on several important indicators, including trends in payrolled employees, employment, unemployment, economic inactivity, vacancies, earnings, and labour disputes. Understanding these trends is crucial for us as a business, as they help us make informed decisions about workforce planning, compensation strategies, and recruitment priorities. By staying updated on these key figures, we can better anticipate changes in the labour market and respond effectively.

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Key Findings

Payrolled Employees

Estimates of UK payrolled employees fell by 25,000 (0.1%) between April 2025 and May 2025. It also fell by 135,000 (0.4%) between May 2024 and April 2025.

The total number of payrolled employees in the UK decreased by 68,000 (0.2%) over the quarter and fell by 81,000 (0.3%) over the year, looking at March to May 2025.

The early estimate for June 2025 showed a decrease of 41,000 (0.1%) on the month, and a decrease of 178,000 (0.6%) on the year to 30.3 million.

Employment and Unemployment

The UK employment rate for people aged 16 to 64 years stood at 75.2% for March to May 2025. This is above estimates of a year ago, and up in the latest quarter.

The unemployment rate for those aged 16 and over was estimated at 4.7% in March to May 2025, above estimates of a year ago and up on the quarter.

The economic inactivity rate, which refers to individuals aged 16 to 64 not in work or actively seeking work, was 21%, showing a decrease compared to both last year and the previous quarter.

Vacancies and Claimant Count

Job vacancies in the UK from April to June 2025 were estimated at 727,000, showing a fall of 56,000 on the quarter. This marked the 36th consecutive quarterly decline, seeing quarterly falls in 14 of the 18 industry sectors.

The Claimant Count, which tracks the number of people claiming unemployment benefits, rose to 1.743 million, showing an increase both month-on-month and year-on-year.

Earnings Growth

Annual growth in employees’ average regular earnings for both regular earnings (excluding bonuses) and total earnings (including bonuses) was 5.0% in March to May 2025.

When adjusted for inflation, regular pay was 1.1% and total pay was 1% in March to May 2025, based on the Consumer Prices Index including owner occupiers’ housing costs (CPIH)

Labour Disputes

Labour disputes resulted in an estimated 37,000 working days lost in May 2025.

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The UK labour market is showing signs of cooling. Although the employment rate rose to 75.2% and economic inactivity fell to 21%, payrolled employees declined by 68,000 over the quarter, and unemployment increased to 4.7%. Vacancies fell for the 36th consecutive quarter to 727,000, while the Claimant Count rose to 1.743 million.

Earnings grew by 5.0%, with real-terms growth of 1.1%, but 37,000 working days were lost to labour disputes in May. These shifts underline the need for agile workforce planning—balancing pay, retention, and recruitment in a changing market.

Source: Labour market overview, UK – Office for National Statistics