The latest UK labour market figures from the Office for National Statistics have shown a decline in regular earnings alongside a rise in unemployment.
Annual growth in employees’ average regular earnings (excluding bonuses) stood at 5.6% in the three months to March 2025. This is down from 5.9% the previous month and the lowest figure since November.
Annual average wage growth including bonuses was 5.5%, down 0.2 percentage points from February.
Adjusted for inflation, using the consumer prices index including owner-occupiers’ housing costs (CPIH), average wage growth was 1.8% for regular pay and 1.7% for total pay.
The unemployment rate stood at 4.5%, up from 4.4% in the three months to February. The number of payrolled employees fell 0.3% to 30.3 million in April compared to a year earlier. Youth unemployment stood at 12.8%.
The largest increase was in the health and social work sector, a rise of 87,000 employees, while biggest decrease was in accommodation and food services, a fall of 107,000 employees.
Labour market statistics
Downturn in hiring activity eased in April
CIPD links Employment Rights Bill with low business confidence
Rethinking talent: Who was never considered in the first place?
The estimated number of vacancies in the UK fell by 42,000, or 5.3%, on the quarter, to 761,000 in the Feb-to-April quarter – the 34th consecutive quarterly decline. Compared to a year ago, this is a 14.7% fall.
Kate Shoesmith, deputy chief executive of the Recruitment and Employment Confederation (REC), said: “While there are few surprises, the lack of momentum in the jobs market is the key issue here, with vacancies falling back further – an expected outcome after recent rises to employment costs. But much of the data now also points towards an upturn in the second half of 2025 – and not before time.”
Ben Harrison, director of the Work Foundation at Lancaster University, said: “Today’s figures suggest the UK labour market is approaching a crossroads. Headlines indicate employment remains resilient and pay growth continues to be strong, while more of those who have been economically inactive are now looking for work.
“However, vacancies are continuing their long-term decline, which may make returning to the labour market more challenging.”
Seemanti Ghosh, principal economist at the Institute for Employment Studies, said: “Employment remains flat, with a modest decline in economic inactivity offset by a corresponding rise in unemployment suggesting that more people are now actively seeking work but are struggling to find it. This is reflected in the increase in the unemployment-to-vacancy ratio compared to the previous month.
“Employers continue to show caution in workforce investment, as evidenced by another drop in job vacancies now at a new low, and a further decline in payrolled employees. Against the backdrop of a cooling labour market and shifting policy environment, the economic outlook for the UK remains uncertain. The underlying trends reveal a fragile environment, where hiring confidence is weak and workforce planning is marked by hesitancy.”
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
HR business partner opportunities on Personnel Today
Browse more HR business partner jobs
