In the three months to September 2025, unemployment and redundancy levels both rose while the number of employed people and payrolled employees fell, vacancy levels plateaued, and wage growth in the private sector is gradually falling. Consequently, the labour market picture is fundamentally the same, and the jobs market is continuing to show signs of weakening.
The UK employment rate (for people aged 16 to 64 years) was estimated at 75.0% in the period between July 2025 and September 2025, which is slightly down on the quarter but up on the year. The UK unemployment rate (for people aged 16 and over) was estimated at 5.0% in the three months to September 2025, representing an increase on quarter and the year.
The UK economic inactivity rate for people aged 16 to 64 years old was estimated at 21.0% in the quarter to September 2025, which is unchanged on the quarter but down on the year. The provisional estimate for the number of vacancies in the UK economy in the three months to October 2025 is 723,000, which is broadly unchanged on the quarter (+2,000) and down on the year (-99,000).
Estimates for payrolled employees in the UK fell by 117,000 (-0.4%) between September 2024 and September 2025 and decreased by 32,000 (-0.1%) between August 2025 and September 2025. The early estimate of payrolled employees for October 2025 decreased by 180,000 (-0.6%) on the year, and by 32,000 (-0.1%) on the month, to 30.3 million. The October 2025 estimate should be treated as a provisional estimate and is likely to be revised when more data is received next month. Annual growth in employees' average regular earnings (excluding bonuses) in Great Britain was 4.6% in the three months to September 2025, and annual growth in total earnings (including bonuses) was 4.8%. Annual growth in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH)), for regular pay and total pay stood at 0.5% and 0.7%, respectively, across the same period.
The data from this month’s release reinforces messages from recent months: unemployment is creeping up, inactivity remains stubbornly high, and a combination of poor productivity and spiralling employment costs are translating into slower rates of wage growth in the private sector. There are also some new stories emerging, including the uptick in redundancy levels and the particular rise in male unemployment. Together, the data highlights that the jobs market is weakening, and high employment costs are having a material impact on businesses’ recruitment budgets and, in some cases, resulting in job losses.
Fortunately, there are low-cost policy levers the Government can pull which would go a long way in helping them to grow the economy and meet their 80% employment target. This includes working with businesses to find a more workable landing zone for the Employment Rights Bill during current and upcoming consultations, as well as committing to allocate the full funding raised through the Growth and Skills Levy to training and skills. It is also key that the Government acknowledges the mounting pressure on firms’ cost base at next week’s Autumn Budget. Adding to employers’ tax burden will ultimately hurt businesses, workers and growth.
