"The engine powering the UK's labour market is still spluttering, with unemployment sticking at a five-year high, wage growth under pressure, especially in the private sector, and the number of people on payroll falling significantly in the final months of 2025. Unsurprisingly the retail and hospitality sectors have shouldered significant strain following increases to the cost of labour and uncertainty amongst consumers in the run up to last year's Budget."
"But there are a few positives to latch onto, the first being that slowing wage growth provides a more benign backdrop for Bank of England rate setters worried about how sticky inflation might continue to be throughout the year. Secondly, after 39 consecutive quarterly declines in vacancy numbers, things seem to have bottomed out and there are tentative signs the UK economy might be turning a corner."
Unemployment in the UK held at 5.1% in the three months to November. Average regular earnings growth slowed to 4.5% and private sector wage growth hit a five-year low. Vacancy numbers showed tentative growth after 39 consecutive quarterly declines, while payrolled employment dipped in December. Retail and hospitality sectors faced significant strain from higher labour costs and consumer uncertainty, reducing seasonal hiring. Slowing wage growth eases pressure on Bank of England rate setters concerned about persistent inflation. Exporters are wary of potential fresh tariffs that could derail recent momentum, and pubs seek continued business rate relief.
Read at London Business News | Londonlovesbusiness.com
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