"The headline figures for the final quarter of 2024 show continued resilience, possibly reflecting the calm before the storm, as the labour market braces itself for a challenging period. The UK employment rate was estimated at 74.9%, above estimates of a year ago, and up in the latest quarter. The UK unemployment rate was estimated at 4.4% in October to December 2024. This is above estimates of a year ago, and up in the latest quarter.
The estimated number of vacancies in the UK decreased by 9,000 on the quarter to 819,000 in November 2024 to January 2025 – the 31st consecutive decrease. We can expect to see this number continue on a downwards trajectory with employers taking a cautious approach to recruitment in the face of increased worker protections, including unfair dismissal becoming a day one right.
Annual growth in employees' average regular earnings, excluding bonuses, in Great Britain was 5.9% in October to December 2024, and annual growth in total earnings, including bonuses, was 6%. Employers have faced the unenviable task of retaining core talent whilst balancing demands for increased pay with rising costs. With the employer National Insurance contributions hike from April this year we are likely to see the earnings figures stall.
With the world stage creating increasing uncertainty to an already turbulent market, labour intensive industries, such as manufacturing, retail and hospitality are likely to face the greatest challenges in the coming months with cost cutting measures an unfortunate reality. It is vital for employers to keep a close eye on changes to employment law and take every opportunity to engage in the ongoing consultations."
DWF comments on UK labour market
Joanne Frew, Global Head of Employment & Pensions at DWF, has commented on the latest UK labour market statistics
