UK Unemployment Climbs to 5% Amid Slowing Job Market
The UK job market is currently experiencing a downturn, as indicated by a rise in unemployment to 5%. This marks the highest rate since the pandemic. Key statistics released by the Office for National Statistics (ONS) reveal a slight decline in payrolled employees and persistent job vacancies.
Recent Employment Data Highlights
According to Liz McKeown, director of economic statistics at the ONS, the latest figures reflect a weakening labour market. The unemployment rate has increased in the most recent quarter, with significant implications for the economy.
- Unemployment rate: 5% (post-pandemic high)
- Payrolled employees fell by 109,000 (0.4% year-over-year)
- Unemployment benefits claims: approximately 1.7 million
- Job vacancies: about 723,000 (unchanged between August and October 2025)
Wage Growth Disparities
The ONS reported a notable difference in wage growth between sectors. Public sector wages saw an increase of 6.6%, while private sector wages increased by 4.2%. Yael Selfin, chief economist at KPMG UK, noted that public sector pay growth is nearing its peak due to government budget constraints. Meanwhile, private sector growth is predicted to decline as more individuals enter the job market, diminishing workers’ bargaining power.
Government Response to Job Market Challenges
In response to the alarming statistics, Work and Pensions Secretary Pat McFadden emphasized that over 329,000 individuals have found work this year. He highlighted the government’s initiatives aimed at revitalizing the workforce.
Richard Carter, head of fixed interest research at Quilter Cheviot, pointed out that many businesses may hesitate to hire in the current climate, especially with a budget statement approaching. He expressed concerns about rising national insurance costs, which could further deter hiring plans.
Concerns from Small Business Leaders
Tina McKenzie, policy chair of the Federation of Small Businesses, criticized the government’s handling of employment challenges. She attributed the rise in unemployment and decreased payroll numbers to stringent regulations and taxes that burden small businesses. McKenzie urged for actionable measures to promote job growth and support the economy.
Overall, the current state of the UK job market signals uncertainties that could affect future employment trends. Stakeholders continue to emphasize the need for proactive policies to ensure sustained job creation and economic stability.
