Employment Holds Steady After Months of Decline
The UK labour market showed early signs of stabilising in October 2025, with a small uptick in payrolled employment offering a rare moment of optimism for recruiters.
Between August 2024 and August 2025, the number of payrolled employees fell by 93,000 (0.3%), but rose slightly by 10,000 (0.0%) between July and August 2025, ending a run of monthly declines.
Looking over the June to August 2025 period — the timeframe aligned with the Labour Force Survey (LFS) — payrolled employees dropped 115,000 (0.4%) year-on-year and 31,000 (0.1%) over the quarter, suggesting the jobs market remains under pressure despite the marginal rebound.
Early figures for September 2025 show a further 100,000 drop year-on-year, bringing the total to 30.3 million, although this estimate is provisional and may be revised upwards.
Vacancies Hit 39th Quarter of Decline
Recruiters are still grappling with weak demand from employers as the vacancy total slipped to 717,000 — a fall of 9,000 (1.3%) in the three months to September. This marks the 39th consecutive quarterly decline, with nine out of 18 industry sectors reporting fewer openings.
According to feedback from the ONS Vacancy Survey, many businesses are choosing not to replace departing staff or delay new hires, citing economic uncertainty and cost pressures. For recruiters, that means a more competitive market with clients prioritising essential hiring over growth.
Employment and Unemployment Shift Slightly
The employment rate edged down to 75.1%, marking a small quarterly dip but remaining above last year’s level. Meanwhile, unemployment rose to 4.8%, indicating that more people are now available for work. The economic inactivity rate stayed steady at 21.0%, continuing a gradual improvement since 2024 as more individuals re-enter the workforce.
For recruiters, this creates a broader candidate pool, particularly in administrative, retail, and healthcare sectors — though opportunities remain limited by low vacancy levels.
Pay Growth Eases but Real Wages Edge Up
Pay growth cooled modestly, with regular earnings up 4.7% and total earnings up 5.0% in the year to August 2025. Real wage growth, adjusted for inflation, remains positive — 0.6% for regular pay and 0.8% for total pay — offering some relief for workers amid high living costs.
Public sector pay continued to outpace the private sector, rising 6.0% compared with 4.4%, buoyed by early pay settlements.
Recruitment Outlook: Careful Optimism
While the labour market remains fragile, the slight increase in employment hints that conditions may be bottoming out. Recruiters should expect continued caution from clients but can find opportunities by focusing on public sector roles, flexible hiring, and reskilling initiatives as the UK jobs market steadies.
Vacancies and jobs in the UK: October 2025
- The estimated number of vacancies in the UK fell by 9,000 (1.3%) on the quarter, to 717,000 in July to September 2025.
- This is the 39th consecutive period where vacancy numbers have dropped compared with the previous three months, with vacancies decreasing in half of the 18 industry sectors.
- Total estimated vacancies were down by 115,000 (13.8%) in July to September 2025 from the level of a year ago, and are 78,000 (9.8%) below their pre-coronavirus (COVID-19) January to March 2020 level.
- The number of unemployed people per vacancy was 2.4 in June to August 2025; this is up from 2.3 in the previous quarter (March to May 2025).
Office for National Statistics (ONS), released 14 October 2025, ONS website, statistical bulletin: Labour market overview, UK: October 2025
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