Labour Market Outlook | Unemployment rising, vacancies shrinking & pay growth slowing - ONS latest

The UK labour market is showing clearer signs of slowing. According to the latest Office for National Statistics figures released this week, vacancies have dropped for the 38th consecutive quarter, unemployment has edged up, and wage growth, while still positive in nominal terms, offers little comfort after inflation. 

Experts warn that jobseekers are facing stiffer competition, and businesses are increasingly cautious about hiring or expanding.

Latest figures reflect loosening demand

ONS estimates show that the number of vacancies in the UK fell by 10,000 (1.4%) in the three months to August 2025, down to 728,000. This decline marks the 38th consecutive period of falling vacancy numbers, with nine of the 18 industry sectors seeing fewer advertised roles than in the previous quarter.

At the same time, employment is weaker when measured via payrolled employees. The number of people on company payrolls fell by 142,000 (0.5%) between July 2024 and July 2025, while the year-on-year change for payrolled employees in May to July 2025 was down by about 125,000 (0.4%). Meanwhile, over the latest quarter the drop was about 51,000 (0.2%). The early estimate for August suggests a further year-on-year fall of 127,000 (0.4%), though monthly change was small.