ONS Labour Market October 2025: 75.1% Employment Rate and Vacancy Numbers Fall For the 39th Consecutive Period
The latest Office for National Statistics Labour Market Information was released today for the period of June to September 2025.
Employment Rate, Unemployment Rate and UK Economic Inactivity
- Between June to August 2025, the estimated UK employment rate decreased 0.2 percentage points to 75.1% (against a Government target of 80% employment rate), the UK unemployment rate increased 0.2 percentage points to 4.8%, and the UK economic inactivity rate was largely unchanged at 21.0% compared with March to May 2025.
- The UK employment rate for people aged 16 to 64 years was estimated at 75.1% in June to August 2025. This is down in the latest quarter but above estimates of a year ago.
- The UK unemployment rate for people aged 16 years and over was estimated at 4.8% in June to August 2025. This is up in the latest quarter and above estimates of a year ago.
- The UK economic inactivity rate for people aged 16 to 64 years was estimated at 21.0% in June to August 2025. This is largely unchanged in the latest quarter but below estimates of a year ago.
- The UK Claimant Count for September 2025 increased on the month but decreased on the year to 1.692 million.
One in five (19.9%) around 830,000 young people are now economically inactive, compared with 16.4% young people, in 2021 as the UK was emerging from the Covid 19 pandemic.
Job Vacancies Continue To Drop And Fall For The 39th Consecutive Quarter!
- 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).
Estimates for payrolled employees in the UK fell by 93,000 (0.3%) between August 2024 and August 2025, but increased by 10,000 (0.0%) between July 2025 and August 2025.
When looking at June to August 2025, the period comparable with the ONS Labour Force Survey (LFS) estimates, payrolled employees fell by 115,000 (0.4%) over the year, and by 31,000 (0.1%) over the quarter.
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. The September 2025 estimate should be treated as a provisional estimate and is likely to be revised when more data are received next month.
Employment Rate
The UK employment rate for people aged 16 to 64 years was estimated at 75.1% in June to August 2025. This is down in the latest quarter but above estimates of a year ago.
The UK unemployment rate for people aged 16 years and over was estimated at 4.8% in June to August 2025. This is up in the latest quarter and above estimates of a year ago.
The UK economic inactivity rate for people aged 16 to 64 years was estimated at 21.0% in June to August 2025. This is largely unchanged in the latest quarter but below estimates of a year ago.
The UK Claimant Count for September 2025 increased on the month but decreased on the year to 1.692 million.
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 9 of the 18 industry sectors.
Annual growth in employees’ average earnings in Great Britain for regular earnings (excluding bonuses) was 4.7%, 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. However, the public sector annual growth rate is affected by some public sector pay rises being paid earlier in 2025 than in 2024. RTI pay data are also published and provide a provisional, timelier estimate of median pay. The two data sources generally trend well for mean total pay.
Annual 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.
Annual growth in real terms, adjusted for inflation using the Consumer Prices Index excluding owner occupiers’ housing costs (CPI), was 0.9% for regular pay and 1.2% for total pay, in June to August 2025.
There were an estimated 15,000 working days lost because of labour disputes across the UK in August 2025.
Sector Reaction
Responding to the latest ONS figures, Stephen Evans, chief executive of Learning and Work Institute (L&W), 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.”
The ONS published its latest labour market figures this morning. The Recruitment and Employment Confederation (REC) Chief Executive Neil Carberry said:
“There are no surprises in today’s data for readers of the business surveys. It remains a challenging market for employers who are still waiting for a real upturn in economic confidence. Our own survey of employers’ sentiment suggests employers are feeling better about themselves but are lurking in the shadows of the labour market waiting for better news on the wider economy before they come out into the light.
“Pay is doing nothing to spook the Bank of England interest rates setters, but the gap between pay set by the labour market in the private sector and those areas where the government is setting pay seems unsustainable. This is a function of government ramping public sector awards and the Minimum Wage at the same time as taxing away pay rises in the private sector through its National Insurance raid.
“Progress on economic inactivity has stalled, which shows the pressure on government initiatives to get people back to work and the need to boost private sector hiring. A Budget for business next month – rather than one that holds firms back – is essential. That means avoiding unaffordable tax rises, taking a pragmatic approach to making necessary changes to the Employment Rights Bill, supporting flexible work, and improving public sector recruitment by tackling the higher costs the anti-agency drive in the NHS is driving into the system.”
Neil Carberry added:
“It’s clear that the data produced by ONS continue to diverge on key estimates like employment. This is far from ideal, but the answer is to challenge the RTI data as well as the LFS. We remain unconvinced that the RTI data, drawn on tax data, is a fully effective measure of employment.”
Ben Harrison, Director of the Work Foundation at Lancaster University, a leading think tank for improving working lives in the UK:
“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. Unemployment has risen by 297,000 on the year, and continues to creep upwards, now sitting at 4.8%. Meanwhile the number of job vacancies has fallen for the 39th consecutive period compared with the previous three months.
“The job market continues to be very challenging for younger workers. Over one in ten young people aged 18-24 year old (12%) are unemployed, with 112,000 stuck long-term unemployed for more than 12 months. This has risen by five percentage points on the year and provides a major concern for policymakers.
“Ministers must learn from previous attempts to tackle long-term youth unemployment and ensure they support – not sanction – young people into real, paid opportunities and give participants agency to make decisions that benefit their future careers and health.
“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.
“Against this backdrop, the Chancellor faces a series of difficult choices in her forthcoming Budget statement. While the focus will be on fiscal headroom, the Chancellor must continue to prioritise boosting living standards and job opportunities in the years ahead.“
Please note: Data is from Shifting Challenges (released 11 July 2025) – using data from a Survation survey of 3,796 workers aged 16-64 living in the UK. The fieldwork took place online between 2 and 12 May 2025).
Abigail Coxon, Principal Economist at Youth Futures Foundation, comments:
“Today’s ONS labour market data paints a concerning employment picture for young people not in full-time education. Between June and August 2025, 411,000 16-24 year olds were unemployed and actively looking for work – an alarmingly high rate of 12.3%. It represents a sharp rise since 2022, when youth unemployment was comparably low, meaning 175,000 more young job seekers are now out of work.
“The data also shows a growing number of young people not in full-time education who are neither in work nor actively seeking it. One in five (19.9%) – about 830,000 – young people are now economically inactive, compared with 16.4% young people, in 2021 as the UK was emerging from the pandemic.
“During the Labour Party Conference, the Chancellor pledged to abolish long-term youth unemployment. Today’s figures underline just how challenging achieving that ambition will be. The newly announced subsidised work placement scheme for any young person out of work for 18 months is a welcome step, as is the Prime Minister’s commitment to creating more high-quality apprenticeship opportunities. Both will be important parts of a wider, system-level response.
“We welcome the Government’s renewed focus on addressing the stubborn nature of the UK’s youth employment challenge. As preparations begin for the Budget, today’s data shows just how vital it is that any new policy solutions are underpinned by evidence of ‘what works’ – particularly for marginalised young people and those not engaging with existing support. Aside from the moral duty to help our young people thrive, there is a major economic opportunity in addressing this challenge – if we matched the lowest NEET rate in the OECD, that could deliver a boost to the economy of £69bn.”
Jeanette Wheeler, Chief People Officer at MHR
“Today’s ONS figures show a labour market in continued flux. Unemployment has nudged up to 4.8% while vacancies have fallen again to around 717,000, the latest in a long run of quarterly declines. Pay growth is still positive, but the combination of fewer advertised roles and more people looking for work is changing the balance between supply and demand across sectors.
“For employers, this creates both risks and opportunities. The risk is workforce stagnation. With fewer entry points and mobility slowing, organisations risk skills atrophy and narrower progression routes for graduates and young people, and with vacancies falling in 9 of 18 sectors, it’s clear this isn’t just in one area. But, it also presents a clear opportunity to respond. Leaders can invest in upskilling current employees, create clear internal promotion paths, and build AI and tech-native entry-level roles that teach the digital skills that businesses need. Organisations that develop their people from within will future-proof their workforce.
“Looking ahead to this month’s Budget will be critical for businesses, and policymakers and employers need to work together to widen routes into work. Better skills funding, stronger apprenticeships, and joined-up education to employment pathways will make a real difference.”
Jack Kennedy, Senior Economist at Indeed said:
“The UK labour market has stabilised in recent months. It’s settled into a pattern in which hiring appetite remains weak but job losses are limited, a tough environment for those out of work and new entrants – while those who have a job are more likely to stay put.
“With employer confidence still somewhat fragile, the labour market seems unlikely to shake off its stagnancy soon, though improved visibility post-November’s Budget may give businesses a little more certainty ahead of their workforce planning for next year.
“While pay pressures continue to gradually ease, it’s still running hot and the next rate cut from the Bank of England looks off the table until 2026.”
Responses