UK labour market continues to weaken

12 Aug 2025

The UK labour market continues to weaken, shedding 165,000 jobs since last October, according to the latest data from the Office for National Statistics (ONS).

The number of vacancies, which has now been falling steadily since early 2022, fell to 718,000 in June, which is a fall of 44,000 for the quarter.

Payrolled jobs are still falling fastest in the low paying hospitality sector, suggesting that the mini shock of the employer National Insurance contributions (NICs) and National Living Wage rise combination in April is still feeding through.

Pay growth continues to weaken too, but at a slower pace than the jobs market. Annual private sector wages grew by 4.8% in the year to June – down from 5.3% the year before.

Hannah Slaughter, Senior Economist at the Resolution Foundation, said: 'The UK's post-pandemic labour market was red hot. But that period is officially over – the labour market is loose and getting looser, having shed 165,000 payrolled jobs over the past eight months.

'These jobs falls continue to be concentrated in low paying sectors like retail and hospitality. This reinforces the government's decision to take a cautious approach to the minimum wage next year as the economic fallout from the recent employer NICs rise continues.'