Declines in job vacancies and the number of payrolled employees are levelling off, according to labour market data for October 2025 from the Office for National Statistics (ONS).
The estimated number of vacancies in the UK fell by 1.3% on the quarter to 717,000 in July to September 2025. This is the 39th consecutive period where vacancy numbers have fallen compared with the previous three months, with vacancies decreasing in half of all 18 industry sectors.
Estimates for payrolled employees in the UK fell by 93,000 (0.3%) between August 2024 and August 2025, but increased slightly by 10,000 (0.0%) between July 2025 and August 2025.
The early estimate of payrolled employees for September 2025 decreased by 100,000 (0.3%) on the year, and by 10,000 (0.0%) on the month, to 30.3 million.
Liz McKeown, ONS director of economic statistics, said: “After a long period of weak hiring activity, there are signs that the falls we have seen in both payroll numbers and vacancies are now levelling off.”
Annual growth in employees’ average earnings in Great Britain for regular earnings excluding bonuses was 4.7% (down from 4.8% the month before) and for total earnings (including bonuses) was 5.0% in June to August 2025.
Annual average regular earnings growth was 4.4% for the private sector and 6.0% for the public sector.
“Wage growth slowed in the private sector to its lowest rate in nearly four years, but public sector pay growth increased, reflecting some public sector pay rises being awarded earlier than they were last year,” McKeown added.
Unemployment climbed to its highest level since the Covid lockdown. The UK unemployment rate for people aged 16 and over was estimated at 4.8% in June to August 2025.
The UK economic inactivity rate for people aged 16 to 64 was estimated at 21.0% in June to August 2025, largely unchanged in the latest quarter but below estimates of a year ago.
Ben Harrison, director of the Work Foundation at Lancaster University, said: “Today’s figures present serious challenges for ministers hoping to ‘Get Britain Working’ and ‘Make Work Pay’ for workers across the UK.
“After a bruising first half of the year for the labour market, the competition to get into work continues to intensify, with more people now looking for work at a time when job openings are falling.”
Annual wage growth in real terms, adjusted for inflation using the consumer prices index including owner-occupiers’ housing costs (CPIH), was 0.6% for regular pay and 0.8% for total pay, in June to August 2025.
Harrison said: “Real pay growth appears to be on borrowed time and has fallen to 0.6%, the lowest level in two years, as inflation continues to erode the impacts of wage rises. Despite historically strong wage growth at 4.7%, persistently high inflation, and in particular surging food prices, has left one in six workers (17%) reporting they struggle to pay their bills each month.”
TUC general secretary Paul Nowak said: “There are chinks of light in the jobs market with a welcome levelling off of falls in payrolls and vacancies. But there are no quick or easy fixes to wider labour market challenges, which have been a long time in the making.
“The government is on the right track with significant public investment, stronger workers’ rights and improving the support people need to get into work. The Chancellor must build on this at the Budget, sustaining investment in our infrastructure and continuing to repair our public services.”
Stephen Evans, chief executive of the Learning and Work Institute, said: “Falls in employment and vacancies were smaller than earlier this year, suggesting the labour market is flattening rather than crashing. But sectoral differences remain, with payroll employment down 110,000 in retail and hospitality compared to a year ago, sectors where rises in the minimum wage mean earnings growth is relatively high.
“Hitting the government’s 80% employment rate target would require an extra two million people in work, meaning rapidly expanding employment support and working with employers to widen their recruitment strategies.”
Michael Stull, managing director of ManpowerGroup UK, said: “There has been a pervasive drop in forward-looking hiring from the continued uncertainty in the market, and it’s resulting in a ‘no hire, no fire’ attitude among businesses.”
He added: “The assumption is that taxes and other costs are going to go up, so employers are continuing to tighten belts to be prepared, which is holding down hiring. There is also uncertainty on the employee part, with increasing costs and inflation, people are reluctant to move roles.”
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