The UK labour market showed signs of cooling in late 2025, with the number of payrolled employees falling for the eighth time in the past 12 months, according to the latest figures from the Office for National Statistics (ONS).
An early provisional estimate for December 2025 puts the total number of payrolled employees at 30.2 million. This represents a decrease of 33,000 (0.1%) from November 2025 and a drop of 184,000 (0.6%) compared with December 2024. The ONS noted that payrolled employees, derived from HM Revenue and Customs' Real Time Information (RTI) data, provide the most timely and reliable measure of employee numbers.
The decline has been consistent in recent periods. Between November 2024 and November 2025, the figure fell by 155,000 (0.5%). Looking at the September to November 2025 period – aligned with Labour Force Survey (LFS) estimates – payrolled employees decreased by 43,000 (0.1%) over the quarter and by 135,000 (0.4%) over the year. The ONS highlighted that these reductions mark a broader trend of softening in payroll numbers throughout much of 2025.
The bulletin did not provide detailed breakdowns by region, industry, age, or sex for the latest payroll figures, but the overall downward trajectory contrasts with earlier post-pandemic recovery patterns, where payroll numbers had stabilised at higher levels.
Broader labour market indicators presented a mixed picture for September to November 2025. The employment rate for those aged 16 to 64 stood at 75.1%, remaining largely unchanged over the quarter but higher than a year earlier. The unemployment rate rose to 5.1%, up from the previous quarter and above the level seen 12 months prior. Economic inactivity for the same age group fell to 20.8%, down over the quarter and below the year-ago figure.
Wage growth continued to moderate. Annual growth in regular average weekly earnings (excluding bonuses) was 4.5% in Great Britain, while total earnings (including bonuses) grew by 4.7%. In real terms, adjusted for CPIH inflation, regular pay increased by 0.6% and total pay by 0.8%. Public sector regular earnings growth reached 7.9%, influenced by base effects from earlier pay awards, compared with 3.6% in the private sector.
Job vacancies showed a slight uptick, with an early estimate of 734,000 for October to December 2025, up 10,000 (1.3%) from the previous three months. The experimental Claimant Count for December 2025 rose month-on-month to 1.677 million but was lower than the previous year.
These figures, released in the ONS's January 2026 labour market overview, underscore a labour market experiencing gradual weakening in payroll employment amid moderating wage pressures and stable overall participation rates.
