UK wage growth slows and vacancies drop, as labour market cools
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Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Wage growth across the UK has slowed, and the number of people on payrolls has fallen, as Britain's jobs market continues to cool.
The latest UK labour market data, just released, shows that average regular earnings (excluding bonuses) rose by 5.6% in January to March 2025, down from 5.9% in the previous quarter.
Growth in pay including bonuses also slowed – it rose by 5.5% in January-March, down from 5.7% in the final three months of 2024.
In January to March 2025, average weekly earnings were up 5.6% on the year excluding bonuses and 5.5% including bonuses. Regular pay grew fastest in the retail and hospitality sector.
Read the release ➡️ https://t.co/fGCmGWT23L pic.twitter.com/nubYNHu2bY — Office for National Statistics (ONS) (@ONS) May 13, 2025
Although wages growth slowed, earnings are still rising faster than prices in the shops. Once you adjust for inflation, pay (both regular and total) rose by 2.6% per year on both measures.
Minister for Employment, Alison McGovern has said:
'Real wages are growing with around 200,000 more people into work since the publication of our Get Britain Working plan.
'But we know that the Government's Plan for Change needs more workers – in every part of our country. That's why we will continue to change Jobcentres, invest in British industry, and get help to those who need it until everyone who can work has got a decent job and a good income.'
But, today's report also shows a drop in demand for workers, as UK companies adjust to the increase in the minimum wage, and higher national insurance contributions, which kicked in at the start of April.
The Office for National Statistics reports that the number of payrolled employees felled by 33,000 in April, following a 47,000 drop in March.
On an annual basis, there were 106,000 fewer payrolled employees in April than a year ago, the ONS estimates.
In another sign that firms are being cautious, the number of vacancies in the UK fell by 42,000 in the January-March quarter, the 34th consecutive quarterly decline in a row. The biggest fall came in the construction sector
ONS director of economic statistics Liz McKeown says:
'Wage growth slowed slightly in the latest period but remains relatively strong, with public and private sectors now showing little difference.
'The broader picture continues to be of the labour market cooling, with the number of employees on payroll falling in the first quarter of the year. The number of job vacancies has also fallen again, with the rate of decline increasing in the last few months.' The agenda 7am BST: UK labour market report
10am BST: ZEW survey of eurozone economic confidence
10am BST: Environment, Food and Rural Affairs Committee (EFRA) to quiz the CEO, CFO and Chair of Thames Water
1.30pm BST: US inflation report for April Share Show key events only Please turn on JavaScript to use this feature
Here are more key facts from this morning's jobs report: The UK employment rate for people aged 16 to 64 years was estimated at 75.0% in January to March 2025. This is above estimates of a year ago, but largely unchanged in the latest quarter.
The UK unemployment rate for people aged 16 years and over was estimated at 4.5% in January to March 2025. This is above estimates of a year ago, and up in the latest quarter.
The UK economic inactivity rate for people aged 16 to 64 years was estimated at 21.4% in January to March 2025. This is below estimates of a year ago, and down in the latest quarter. Share
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Wage growth across the UK has slowed, and the number of people on payrolls has fallen, as Britain's jobs market continues to cool.
The latest UK labour market data, just released, shows that average regular earnings (excluding bonuses) rose by 5.6% in January to March 2025, down from 5.9% in the previous quarter.
Growth in pay including bonuses also slowed – it rose by 5.5% in January-March, down from 5.7% in the final three months of 2024.
In January to March 2025, average weekly earnings were up 5.6% on the year excluding bonuses and 5.5% including bonuses. Regular pay grew fastest in the retail and hospitality sector.
Read the release ➡️ https://t.co/fGCmGWT23L pic.twitter.com/nubYNHu2bY — Office for National Statistics (ONS) (@ONS) May 13, 2025
Although wages growth slowed, earnings are still rising faster than prices in the shops. Once you adjust for inflation, pay (both regular and total) rose by 2.6% per year on both measures.
Minister for Employment, Alison McGovern has said:
'Real wages are growing with around 200,000 more people into work since the publication of our Get Britain Working plan.
'But we know that the Government's Plan for Change needs more workers – in every part of our country. That's why we will continue to change Jobcentres, invest in British industry, and get help to those who need it until everyone who can work has got a decent job and a good income.'
But, today's report also shows a drop in demand for workers, as UK companies adjust to the increase in the minimum wage, and higher national insurance contributions, which kicked in at the start of April.
The Office for National Statistics reports that the number of payrolled employees felled by 33,000 in April, following a 47,000 drop in March.
On an annual basis, there were 106,000 fewer payrolled employees in April than a year ago, the ONS estimates.
In another sign that firms are being cautious, the number of vacancies in the UK fell by 42,000 in the January-March quarter, the 34th consecutive quarterly decline in a row. The biggest fall came in the construction sector
ONS director of economic statistics Liz McKeown says:
'Wage growth slowed slightly in the latest period but remains relatively strong, with public and private sectors now showing little difference.
'The broader picture continues to be of the labour market cooling, with the number of employees on payroll falling in the first quarter of the year. The number of job vacancies has also fallen again, with the rate of decline increasing in the last few months.' The agenda 7am BST: UK labour market report
10am BST: ZEW survey of eurozone economic confidence
10am BST: Environment, Food and Rural Affairs Committee (EFRA) to quiz the CEO, CFO and Chair of Thames Water
1.30pm BST: US inflation report for April Share
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