The UK’s wage growth fell while the country’s unemployment rate remained steady towards the end of 2025, according to the latest figures from the Office for National Statistics (ONS).
UK average regular earnings growth dropped to 4.5 per cent in the three months to November, however was 0.9 per cent higher after taking Consumer Prices Index (CPI) inflation rate into account.
“The number of employees on payroll has fallen again, with reductions over the last year concentrated in retail and hospitality, and reflecting ongoing weak hiring activity,” Liz McKeown, director of economic statistics at the ONS said.
Unemployment has remained an issue for the Labour Government, with Chancellor Rachel Reeves under pressure to get more young people in employment and reignite the British economy.
The ONS has published the latest unemployment figures for the UK
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Last month, figures from the ONS revealed that the number of payrolled workers slipped by 22,000 in September while the unemployment rate hit 5.1 per cent for the period between August and October.
At the time, Ms McKeown shared: “The overall picture continues to be of a weakening labour market.”
Professor Emeritus Joe Nellis, an economic adviser at MHA, said: “Labour market data for November reported an unemployment rate of 5.1 per cent, signaling that many employers remain cautious.
“Recruitment has softened and some firms continue to reduce headcount, reflecting weaker demand in some sectors, still-tight financial conditions and the lingering effects of higher costs.
Rachel Reeves delivered the Budget in the Commons last year | PA
“This is not a collapse, but we are seeing a meaningful loosening compared with the exceptionally tight labour market seen in recent years.However, the long-term trajectory for the labour market is more positive.
“Unemployment is likely to peak in the early months of 2026 and then cool as the year progresses. As stable — if not expansive — growth filters through the economy, and businesses are able to act with more certainty following the Autumn Budget and commit to long-term recruitment decisions, we can expect unemployment to fall.”
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