UK Employment Growth Stalls as Job Vacancies Drop, Wages Cool
(MENAFN) Britain's labor market showed further signs of slowing down in early 2025, with wages growing at a slower pace, unemployment rising, and job openings continuing to fall, according to official data released on Tuesday.
The Office for National Statistics (ONS) reported that the employment rate stood at 75.0% in the first quarter of 2025, a slight increase compared to the same period the previous year. However, the unemployment rate was also higher than it had been a year ago.
Between February and March, the number of employees on company payrolls fell by 47,000, with early estimates predicting an additional decrease of 33,000 in April. The total number of payrolled employees reached 30.3 million in March.
Wage growth in the UK continued to ease. Average weekly earnings, excluding bonuses, rose by 5.6% in the three months to March compared to the same period last year, a slowdown from 5.9% in the previous quarter. Including bonuses, total pay grew by 5.5% year-on-year. After adjusting for inflation, real regular pay saw a 1.8% increase.
The number of job vacancies fell by 42,000 between February and April, marking the 34th consecutive quarterly drop. The current vacancy count stands at 761,000, just below pre-pandemic levels.
Economists attributed the slowdown to several factors, including higher payroll taxes and the recent rise in the minimum wage. The retail and hospitality sectors, in particular, saw a sharp increase in job cuts during March and April.
While labor demand appears to be weakening, analysts highlighted that wage growth remains high, creating challenges for the Bank of England’s ongoing efforts to curb inflation.
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