The UK labour market remains relatively tight, with employment high by historical standards, though signs of cooling are emerging as vacancies continue to fall and hiring activity slows. Pay growth is easing in nominal terms, while real wages have begun to recover modestly as inflation falls. Despite this, cost pressures and skills shortages persist across several sectors.
This edition brings together the latest ONS data, policy announcements, research findings and industry insights, all carefully curated to help labour providers and labour users remain informed, compliant and competitive.
From all of us here at Pure Staff, we would like to wish our clients and candidates a very happy Christmas and best wishes for a healthy and successful year ahead. As we close out the year, we thank you for your continued partnership—it plays a vital role in ensuring we can continue to support your business with flexible, reliable workforce solutions.
Key Statistics from the ONS
Unemployment Rises: The overall unemployment rate has risen to 5.1%, with 1.832 million people unemployed. Crucially, youth unemployment remains a serious concern, with the 16-17 age group hitting 36.6% and the 18-24 age group at 13.4%.
Falling Employment and Vacancies: The employment rate fell slightly to 74.9%, with the number of people in work at 34.226 million. Furthermore, job vacancies are broadly unchanged on the quarter but have fallen by 77,000 over the last year to 729,000. This trend has led to a ratio of 2.5 unemployed people per vacancy, up from the previous quarter.
Inactivity and Payroll: Economic inactivity decreased slightly on the quarter to 21.0%, with 9.099 million people inactive, which is 469,000 higher than pre-pandemic levels. The estimate of payrolled employees for November 2025 decreased by 38,000 on the month and is down 171,000 on the year to 30.3 million.
Pay Growth Slows in Real Terms: Annual growth in regular pay (without bonus) stood at 4.6%, with total pay (with bonus) at 4.7%. However, when adjusted for inflation, regular pay growth was only 0.5% and total pay growth was 0.6%.
Redundancies and Disputes: Redundancy rates increased to 5.3 per thousand employees. Meanwhile, working days lost to disputes stood at 39,000 in October 2025.
What This Means for Employers and Job Seekers
The shift towards higher unemployment and fewer vacancies means that candidate availability is statistically improving. With 2.5 unemployed people now available for every vacancy, employers may find it slightly easier to attract applicants compared to previous years. However, the continued high level of economic inactivity suggests that a significant portion of the potential workforce remains disengaged.
For employers, the focus should remain on retention and efficient recruitment processes. While the immediate pressure to hike wages has eased slightly with nominal pay growth slowing, the modest real-terms growth suggests employees are still feeling the cost-of-living squeeze. Competitive packages that go beyond just base salary will be key to securing top talent, especially from the younger demographic where unemployment is starkly high.
How Pure Staff Can Help
Navigating a changing labour market requires a recruitment partner who understands your sector inside and out. Whether you need flexible temporary staff to manage seasonal peaks in industrial and warehousing, or reliable permanent candidates for driving and commercial roles, Pure Staff is here to support you.
We can help you adapt your hiring strategy to these new dynamics, ensuring you attract the right talent while remaining compliant and cost-effective.
Get in touch with our team today to discuss your workforce requirements for 2026.
