Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Latest NewsInflationJob creation and lossesLabour marketPay & benefits

Wages rise as job vacancies continue to fall

by Kavitha Sivasubramaniam 18 Feb 2025
by Kavitha Sivasubramaniam 18 Feb 2025 Shutterstock / PeopleImages.com - Yuri A
Shutterstock / PeopleImages.com - Yuri A

UK wages are growing while job vacancies continue to fall, according to the latest official figures.

New data from the Office for National Statistics (ONS) showed annual average earnings increased to 5.9% in the quarter ending in December 2024 – a rise of 0.3% from the previous three-month period and the quickest increase since April 2024. Annual earnings growth including bonuses climbed from 5.5% to 6%.

Wages outpaced inflation measured by the consumer prices index by 3.4 percentage points between October and December last year, the figures revealed.

Earnings growth for the private sector was 6.2%, while in the public sector it was 4.7%.

The ONS found the number of job vacancies dropped for the 31st consecutive period in the three months to January, falling by 9,000 to 819,000. However, these are still above pre-pandemic levels.

The UK’s labour market

What does ‘stagflation’ mean for the labour market?

UK labour market outlook uncertain post budget

Labour market shows ‘signs of life’, says REC

A revised estimate for December 2024 showed the number of employees on the payroll was down 14,000 from the month before. The figure showed an increase of 44,000 (0.1%) year-on-year.

A provisional estimate for January 2025 was up 21,000.

ONS director of economic statistics Liz McKeown said: “Growth in pay, excluding bonuses, rose for a third consecutive time, with increases seen in both the private and public sector. After taking account of inflation, real pay growth also increased slightly.

“The number of employees on payroll was broadly unchanged in the last three months of the year, continuing a medium-term trend of slowing growth. The number of vacancies also continued to fall in the latest quarter, albeit more slowly, with the total number remaining a little above its pre-pandemic level.”

However, she advised caution when interpreting the figures because although the number of people interviewed for the survey is once again higher this quarter, recent improvements to data collection are still feeding through to headline estimates.

Jack Kennedy, senior economist at Indeed, said: “Stagflation fears continue to stalk the UK economy as hot wage growth limits the dose of monetary medicine the Bank of England will likely be able to administer. The ailing labour market could use a shot in the arm amid warnings of job cuts and hiring freezes ahead of April’s minimum wage rise and National Insurance hike. But with pay growth running at 6% in December, concerns over inflation persistence mean rate setters continue to signal only gradual interest rate cuts, despite the economy hovering on the edge of recession.”

He highlighted that the Indeed Wage Tracker suggested strong pay pressures continued into January, with posted wage growth of 6.1% year-on-year.

Kennedy added: “Pay pressures are running around double the levels consistent with sustainably keeping inflation at the Bank’s 2% target, giving policymakers an ongoing headache.

“Real-time job postings data shows hiring demand remains soft but at least isn’t getting any weaker. UK job postings have broadly trodden water since October’s Budget, remaining 15% below pre-pandemic levels as of mid-February. Employers continue to sit on their hands amid uncertain economic prospects, with few having confidence to dial up hiring in the current climate.”

Kate Shoesmith, deputy chief executive of theRecruitment and Employment Confederation, said: “Many businesses are continuing to tread water. They are hiring, but at a slower pace than any of us would like. The increase in the number of payrolled employees and the small rise in the employment rate, both on the quarter and the year, demonstrates the resilience of businesses and the UK labour market.

“But employers need support if we are to see real growth and an uplift in the economy overall. That calls for investment, rather than cost-cutting. We need government to work with business on strategies that boost productivity, a strong Industrial Strategy that prioritises infrastructure investment and creates jobs, and skills development programmes that meet employer needs.

“The rise in pay is to be expected in an economy that still grapples with skills shortages in key roles, and should not unduly concern the Bank of England or impact interest rates in our opinion. It’s also important to avoid jumping to conclusions on pay at this point, as many pay rises typically happen in April at the start of a new tax year, and we have yet to see the true impact of the national insurance rises that will come into play at the same time.”

The ONS will publish its latest inflation data tomorrow (19 February).

 

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

 

HR roles in recruitment consultancy on Personnel Today


Browse more HR roles in recruitment consultancy

Kavitha Sivasubramaniam

Kavitha Sivasubramaniam is an experienced journalist, editor and communications professional who has been working in B2B publishing for more than 17 years. After graduating from Bournemouth University with a degree in Multi Media Journalism, Kavitha started her career in local and regional newspapers, before moving to consumer magazines and later trade titles, as well as PR. Specialising in pay and reward, she has been editor of a number of HR publications including Pay & Benefits, Employee Benefits, Benefits Expert, Reward and CIPP’s membership magazine, Professional. In June 2024, she won Pay, Reward and Employee Benefits Journalist of the Year at the Willis Towers Watson media awards. She was also named one of Each Person’s top 20 influential HR bloggers and managed a highly commended content team of the year in 2019.

previous post
Scottish workers enjoy UK’s biggest public sector pay rises
next post
Workplace ‘banter’ cause of 57 tribunal claims in 2024

You may also like

Skills shortfall in construction threatens housing target

4 Jul 2025

Fall in entry-level jobs linked to rise of...

30 Jun 2025

Welfare cuts would ‘undermine workforce inclusion and business...

27 Jun 2025

Bank of England says NIC rise is dampening...

27 Jun 2025

Bioethanol plant closure could lead to 4,000 job...

26 Jun 2025

Pay awards remain ‘cautious’ in uncertain economy

25 Jun 2025

Graduate jobs this summer ‘will be toughest since...

25 Jun 2025

Skills receive £1.2bn boost in new industrial strategy

23 Jun 2025

Low-paid could receive ‘Britannia’ dividend under Reform’s non-dom...

23 Jun 2025

UK job market shows signs of resilience

20 Jun 2025

  • Empowering working parents and productivity during the summer holidays SPONSORED | Businesses play a...Read more
  • AI is here. Your workforce should be ready. SPONSORED | From content creation...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+