Jobs market continued to weaken, and has shed 143,000 jobs since October 17 July 2025 The UK jobs market continues to weaken, with the number of payrolled jobs having fallen by 143,000 since last October, while RF analysis suggests the employment rate has been falling for two years, the Resolution Foundation said today (Thursday). The number of people in payrolled employment fell by 75,000 in the three months to May, with initial estimates suggesting a further fall of 41,000 in June, although the latest month is often revised. Since its peak in October 2024, the number of people in payrolled employment had fallen by 143,000 by May. While the ONS estimates of employment, unemployment and inactivity continued to be dogged by data quality issues, the Foundation’s own estimates suggest the 16-64 employment rate has fallen to 75.0 per cent in May – and has been falling consistently for the past two years since peaking at 76.4 per cent in April 2023. The ONS have made improvements to their Labour Force Survey, but it is not yet a reliable guide to labour market trends – currently it shows the employment rate rising. Given the weakening of the jobs market, we might expect some easing in pay growth. There are signs this is underway: nominal average regular earnings growth over the year was 5.0 per cent in the three months to May, down from 5.3 per cent in the previous three months. Moreover, looking at short-term measures there was a significant fall in private sector nominal pay growth – annualised quarter-on-quarter growth was 3.7 per cent in the three-months to May, down from 4.3 per cent in the three-months to April. However, annual pay growth still exceeds any period prior to the pandemic, and crucially pay packets still grew faster than prices over the past year. Real average regular weekly earnings grew by 1.1 per cent in the three months to May. Charlie McCurdy, Economist at the Resolution Foundation, said: “The jobs market continues to weaken and has now shed 143,00 employee jobs over the past seven months. This weakness is starting to show up in lower wage growth, with the recent pay recovery rapidly running out of steam. “The latest jobs data presents a clear case for lowering interest rates. But higher than expected inflation muddies the picture. The Bank’s decision next month is far from straightforward.”
