The UK unemployment rate for those aged 16 and over was 4.4% from November 2024 to January 2025, reflecting a rise over the previous year. Job vacancies held steady at 816,000, while payrolled employees declined nominally by 9,000 but increased by 72,000 annually. Pay growth was reported at 5.9% for regular earnings annually. Experts express concerns about employment growth and business confidence amid inflation and economic uncertainty, highlighting a balancing act for policymakers to address inflation without harming job stability.
The UK labour market is showing definitive signs of strain, with the 31st consecutive period of declining vacancies signalling a persistent cooling in employer hiring appetite.
Business confidence remains fragile, with firms continuing to navigate inflationary pressures, high borrowing costs, and macroeconomic uncertainty.
Policymakers at the Bank of England are now caught in a precarious balancing act, compelled to tame wage-induced inflation pressures without further undermining the fragile jobs market.
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