Copy article

UK jobs data: "Will we see another U-turn, but this time in National Insurance?"

ended 10. June 2025

The UK unemployment rate for people aged 16 years and over was estimated at 4.6% in February to April 2025. This is above estimates of a year ago, and up in the latest quarter, according to official data published this morning. Meanwhile, the estimated number of vacancies in the UK fell by 63,000 on the quarter, to 736,000 in March to May 2025. This was the 35th consecutive quarterly decline with quarterly falls seen in 14 out of the 18 industry sectors. Vacancies were 59,000 below their January to March 2020 level. Feedback suggests some firms may not be recruiting new workers or replacing workers who have left. Also, the early estimate of payrolled employees for May 2025 decreased by 109,000 (0.4%) on the month and decreased by 274,000 (0.9%) on the year to 30.2m. Additionally, estimates for payrolled employees in the UK decreased by 55,000 (0.2%) between March and April 2025 and fell by 115,000 (0.4%) between April 2024 and April 2025 — while the early estimate of payrolled employees for May 2025 decreased by 109,000 (0.4%) on the month and decreased by 274,000 (0.9%) on the year to 30.2 million. Annual growth in employees' average regular earnings excluding bonuses in Great Britain was 5.2% in February to April 2025, and annual growth in total earnings including bonuses was 5.3%. 

Newspage asked business owners and FS experts for their views, below.

11 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Sam Alsop-Hall
Chief Strategy Officer & Co-Founder at Clive Henry Group
This government has spent more time campaigning than governing and it shows. Unemployment is up, vacancies are vanishing, and businesses are losing confidence fast. The economy isn’t turning a corner; it’s circling the drain. Payrolled jobs are down, vacancies are at a five-year low, and firms are quietly stepping back from growth. This isn’t a labour market cooling off, it’s one being frozen out by indecision, over-regulation and a complete lack of commercial understanding in Westminster. The truth is simple: if the government ran a business, it would’ve gone bust years ago. And unless we see a radical shift in policy and leadership, things will only get more bleak – and more desperate – for workers and businesses alike.
Star Quote
Copy

Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
This is alarming but not surprising. The government has made it less attractive to recruit human talent and more appealing to take on non human talent. This was always going to happen but they have accelerated many companies adoption of AI. Will we see another U-turn, but this time in National Insurance?
Star Quote
Copy

Sam Kirk
Managing Director at J-Flex Rubber Products
We were poised to recruit for a new position, however those plans were put on hold when our overhead structure grew by £45K following the Budget, and with our supply chain responding to this increase with price rises of their own, it's hardly surprising to see employment figures in decline.
Copy

Editor
Rob Peters
Principal at Simple Fast Mortgage
Current data paints a picture of a cooling labour market. Rising unemployment, falling vacancies, and declining payroll numbers all point to businesses hitting pause on hiring and looking to cut costs. Wage growth staying above 5% is a positive sign, and unemployment at 4.6% is still historically low, so it's not all doom and gloom. However, there are signs that economic uncertainty is feeding into employment decisions. Businesses are bracing for tougher conditions, and the knock-on effects on consumer spending and housing demand could be significant. If this trend continues into Q3, the government and the Bank of England will have to act to stop confidence from crumbling.
Copy

Editor
David Stirling
Independent Financial Adviser at Mint Wealth
The anticipated squeeze on the the labour market appears to have started in earnest. With the recent increase in employer National Insurance contributions and the introduction of enhanced employee protection, it's an uneasy time to be an employer. These figures show a slackening appetite to take a punt on new employees, and as businesses pause to assess the implications of these policy changes, the broader economy may begin to feel the effects of reduced labour market dynamism.
Copy

Editor
Harry Goodliffe
Director at HTG Mortgages
It’s a worrying mix, fewer jobs, rising unemployment, employer costs climbing and pay growth that’s still being eaten up by inflation. The fact that vacancies have dropped for the 35th straight quarter says a lot: businesses are holding back, confidence is low, and that filters through to everything from spending to mortgage applications. Even with wage growth, if people are feeling uncertain about job security, they’re less likely to borrow or invest in big life choices. The labour market is clearly softening, and that’s usually a warning light for the wider economy.
Copy

Editor
Scott Gallacher
Director at Rowley Turton
Yet more bad news for the government and Rachel Reeves. With the recent National Insurance hikes, rising minimum wage, and continued strong wage growth, it’s hardly surprising to see unemployment on the rise. Businesses are being squeezed from all sides — not just by labour costs but also by high corporation tax. Many employers are telling me work doesn’t pay anymore. Add in falling vacancies and weaker payroll numbers, and we’re looking at an economy in trouble. With inflation having recently risen, the UK appears sliding into a nightmare stagflation scenario — the worst of both worlds: rising prices and a weakening job market.
Copy

Editor
Michelle Lawson
Director at Lawson Financial
No surprises here as, after the Chancellors tax raid, businesses can’t prop up the economy. Reeves is on deep trouble and has already U turned once, will she be forced to go again? This Labour government are the least popular and liked of modern times and can’t just grasp public sentiment no matter what they do. Something needs to be done before this country ends up on the rubbish dump.
Copy

Premium
Debbie Porter
Managing Director at Destination Digital Marketing
It might seem like stealing from the rich (businesses) to give to the poor (employees) but the steep increases in minimum wage rates, plus the additional pressure of a hike in employer NI contributions since April 2025 is a killer for many small businesses whose net profits are often in the 4 and 5 figure realms, rather than the 6, 7, or 8 figure realms. Small businesses make up the majority of the business ecosystem (99.9%) and they provide the U.K. with the majority of the jobs (60%). Handling such steep core costs means one of two choices; to push up prices and pass on the costs to consumers, or making a choice to do more with less to keep costs down. Compulsory liquidations have surged up in 2025, continuing a trend from 2024, so we can see that there is a third choice, and that is to go under. There are no job vacancies in a liquidated company.
Copy

I'm Your P.A.
We are seeing a clear trend of businesses downsizing in response to rising wage costs and increased National Insurance contributions. This pressure on operating margins is leading many employers to reconsider traditional staffing models. As a result, we have seen a noticeable rise in enquiries for Virtual Assistant services, which offer greater flexibility without the burden of long-term contracts or employment law risks.

The hospitality sector appears to be particularly affected, with a growing number of long-established restaurants – some trading for over two decades – now closing their doors. It is evident that recent increases in the minimum wage and National Insurance contributions are having a significant impact on business viability.

To adapt, we and many of our clients are increasingly turning to AI and automation to save time and reduce costs. These tools are helping streamline operations and mitigate the need for additional staff, especially in administrative and customer s
Copy

Harry Mills
Director at Oku Markets
Continuing the theme of precarious and concerning economic conditions in the UK, the unemployment rate rose in April to 4.6%, its highest level since 2021, in a clear sign of cooling in the labour market. Accompanying the jobs figures were average earnings data, which, whilst easing, are still growing well ahead of the Bank of England's inflation target. Earnings excluding bonuses grew at 5.2% y/y whilst earnings including bonuses were 5.3% – both slightly below forecast. Don't forget that April saw a large increase in the minimum wage, which will have (and will continue to) put upward pressure on wages, and therefore inflation! this labour market update isn't likely to affect next week's expected decision by the Bank of England to hold interest rate steady, but it may support an August cut.