UK jobs market sheds 55,000 jobs in April, weakening further 10 June 2025 The jobs market weakened further in April, losing 55,000 jobs on the previous month and nudging down the employment rate, the Resolution Foundation said today in response to the latest ONS labour market statistics. Early data for May looks worse still, pointing to a fall of 109,000 jobs – but this data is prone to revision, with last month’s initial data especially uncertain due to earlier-than-normal data collection. The Foundation’s employment rate estimate – which combines the latest HMRC payroll data and self-employment statistics with ONS population estimates – suggest that the UK’s 16-64 employment rate has fallen from a recent peak of 76.5 per cent in March 2023 to 75.0 per cent in April 2025. The recent falls are being driven by both a rising population and a fall in the number of jobs. This weakness in jobs was echoed by a further fall in vacancies, which dropped by 63,000 on the quarter to reach 736,000. The vacancy rate is now below pre-pandemic levels having fallen consistently since early 2022. The Labour Force Survey unemployment rate (measured with considerable uncertainty) has also edged up to 4.6 per cent in the three months to April. And there are some signs that April’s rise in employer National Insurance combined with the National Living Wage increase may be driving part of the weakness. Employment in the accommodation and food service sector was down by 5.6 per cent in the 12 months to May 2025 – the largest fall of any major sector. We should expect the weakening labour market to start feeding into pay. Nominal growth in regular earnings has reached its lowest rate since last September (5.2 per cent over the year to April 2025, down from 5.9 per cent over the year to February). The Foundation notes, however, that on shorter-term measures there was a small uptick in private sector pay growth in the latest data – quarter-on-quarter growth ticked up to the equivalent of 4.1 per cent a year in the three months to April, up from 3.3 per cent in the three months to March – and typical payrolled earnings grew by 6.2 per cent over the year to April. Hannah Slaughter, Senior Economist at the Resolution Foundation, said: “The recent jobs data paints a picture of a rapidly weakening labour market. The employment rate has been falling for the past two years, first due to rapid population growth and now also a fall in the number of jobs. And early indications suggest this jobs fall has been particularly pronounced in the hospitality sector – which has been especially hard hit by recent rises in the minimum wage and employer National Insurance. “Meanwhile, although we would expect to see a lagged slowdown in pay growth following on from a drop in jobs numbers, short-term measures do not yet point to the kind of slowdown in pay that will make it easy for the Bank of England to support the economy with faster interest-rate cuts.”
