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UK jobs data: "Fewer people working and fewer available vacancies is not the recipe for growth the government was promising"

ended 15. April 2025

The UK unemployment rate for people aged 16 years and over was estimated at 4.4% in December 2024 to February 2025, according to official data published this morning. This is above estimates of a year ago, but largely unchanged in the latest quarter. 

Meanwhile, the estimated number of vacancies in the UK fell by 26,000 on the quarter, to 781,000 in January to March 2025, following a revised December 2024 to February 2025 figure; this was the 33rd consecutive quarterly decline. Vacancies were 15,000 below their January to March 2020 level. This is the first time since March to May 2021 they were below the pre-coronavirus (COVID-19) pandemic figure.

Estimates for payrolled employees in the UK decreased by 8,000 (0.0%) between January and February 2025 but rose by 35,000 (0.1%) between February 2024 and February 2025.

On the salary front, annual growth in employees' average earnings for regular earnings (excluding bonuses) was 5.9% and total earnings (including bonuses) was 5.6%. Annual growth in real terms, adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH), was 2.1% for regular pay and 1.9% for total pay.

Newspage asked verified business owners and (job) market experts for their views, which will appear >> here << until 08:15. Initial comments below.

6 responses from the Newspage community

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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Fewer people working and fewer available vacancies is not the recipe for growth the government was promising. This is the inevitable impact of a tax on jobs, which has only just begun to influence these labour market figures.
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Kate Underwood
Founder & Chief People Strategist at Kate Underwood HR and Training
Everyone’s saying the drop in vacancies means the job market’s cooling, but that’s not how it feels for small businesses. We’re still dealing with skills gaps, rising wages and candidates — especially Gen Z — who know exactly what they want and it’s not just a payslip. They’re looking for purpose, flexibility and a workplace that actually 'gets' them. Just because more people are job hunting doesn’t mean they’re knocking on your door. If small employers want to stand out, now’s the time to shout about your culture, offer real flexibility and back your team to grow.
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Craig Fish
Director at Lodestone Mortgages
This latest jobs data could be the confirmation needed by Threadneedle Street that a cut to the base rate has to come, and soon. Less job vacancies, less people working and lower wage growth are all signs that growth is not happening and, of course, we still aren’t feeling the full effects of recent changes to NI and the ongoing trade war. Something needs to change and it looks like the ball is in the Bank of England's court to deliver that change.
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Debbie Porter
Managing Director at Destination Digital Marketing
Stimulating growth clearly can't happen by raising the cost of doing business, hitting the largest business demographic - the small business community that makes up over 99% of the total UK businesses trading - where it hurts. Salaries have risen, disproportionately at the lowest end of the market, making it a tough decision to decide to hire someone young and inexperienced. The first rung of the ladder just got higher for young people.
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David Morel
CEO at Tiger Recruitment
The jobs market is holding up far better than many would have expected given the double whammy of NI increases and tariffs. At the end of the day, British businesses are forward-thinking, entrepreneurial and robust in their approach. CEOs will do everything they can to creatively counteract any headwinds posed and so far they are succeeding. That said, better news down the track will be welcomed.
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Harry Mills
Director at Oku Markets
Fresh data on the UK labour market showed the unemployment rate was steady at 4.4% in February, not having budged since November, but the more noteworthy update came in the form of average earnings growth, which rose 5.9% year-over-year, excluding bonuses. This pace of wage increases might be described as 'second-round' inflationary effects, but we're not at the stage of talking about a wage-price spiral. Total wage growth was unchanged at 5.6% and last month's figures were revised lower. A cut from the Bank of England in May is expected, with another two quarter-point cuts expected this year, which would take Bank Rate to 3.75% by December – great news for mortgage holders. With today's reports a mixed bag, the Bank of England may well be more interested in tomorrow's inflation report – don't forget that the ONS is also concerned about the quality of its data, particularly due to falling response rates to its labour force surveys.