Key Statistics from the ONS & REC Combined View
Unemployment Rises to a 4-Year High
The overall unemployment rate has risen further to 5.0% (for July to September 2025), its highest level since early 2021. The number of people unemployed now stands at 1.79 million.
- Youth Unemployment: This remains a severe concern, with the unemployment rate for the 16-24 age group rising to 15.3% in the latest data.
- Redundancies: The redundancy rate also increased significantly, up from 3.8 to 4.5 per thousand employees.
Employment Falls, but Job Postings Stabilise
The employment rate continued to ease, falling to 75.0% (down 0.2 percentage points on the quarter), with the number of people in work at 34.19 million.
- Official Job Vacancies: The total number of ONS job vacancies for the three months to October 2025 saw a small increase of 2,000 to 723,000. While this represents a stabilisation after a long series of falls, it remains 72,000 below pre-pandemic levels. The ratio now stands at 2.4 unemployed people per official vacancy.
- REC Postings (October): This ONS stabilisation is supported by the REC data, which showed active job postings reaching 1,669,395 in October 2025, an increase of 2.1% month-on-month, suggesting a recent pick-up in employer advertising intent.
Inactivity and Payroll
Economic inactivity for the 16 to 64 age group was largely unchanged at 21.0%, with 9.08 million people inactive.
- Payrolled Employees: The provisional estimate for the number of payrolled employees in October saw a decline of 32,000 on the month, and is now 180,000 lower than 12 months ago.
Pay Growth Slows in Real Terms
Annual growth in regular pay (excluding bonuses) was 4.6% in the latest quarter, and total pay (including bonuses) was 4.8%.
- Real Terms: When adjusted for inflation (CPIH), regular pay growth slowed to just 0.5%, demonstrating the continued pressure on household finances.
Disputes
Working days lost to labour disputes were estimated at 39,000 in September 2025, which, while higher than August, suggests industrial action is still far below the peaks seen earlier in the year.
What This Means for Employers and Job Seekers
The updated statistics reinforce the cooling trajectory of the UK labour market. Higher unemployment and redundancy rates mean that candidate availability is improving, easing immediate pressure on recruitment across many sectors.
However, the continued high level of economic inactivity and the ongoing decline in the total number of payrolled jobs signal deeper structural challenges. While the recent increase in job postings (vacancies) is a positive sign of market confidence, businesses must focus their recruitment strategies on improving retention and offering competitive compensation packages that genuinely outpace inflation to attract and retain the best talent.
For more information on how to navigate these changing dynamics, read our blog for more information. We can provide guidance on various topics from attracting top talent to managing your workforce effectively.
