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GB: Labour Market Report
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Claimant Count - M/M | 17.9 | 20.1 | -3.3 | ||
| Claimant Count Unemployment Rate | 4.4% | 4.4% | 4.3% | ||
| ILO Unemployment Rate | 5.1% | 5.0% to 5.1% | 5.1% | 5.1% | |
| Average Earnings - Y/Y | 4.6% | 4.5% to 4.6% | 4.7% | 4.7% | 4.8% |
Highlights
The latest UK labour market data point to a gradual cooling in employment conditions, despite continued resilience in pay growth. Payroll employment declined in December 2025, with provisional estimates showing a 0.6 percent annual fall (184,000) and by 0.1 percent (43,000) on the month, reducing the number of payrolled employees to 30.2 million. This weakening reflects slower hiring momentum rather than a sharp contraction, as monthly declines remain modest.
The unemployment rate rose to 5.1 percent, while the employment rate held broadly stable at 75.1 percent. Encouragingly, economic inactivity continued to fall, suggesting some re-engagement with the labour market even as job creation softened. Vacancy numbers edged up marginally, indicating that demand for labour has not collapsed but is becoming more selective.
Earnings growth remains elevated in nominal terms, driven partly by public sector pay settlements. However, once adjusted for inflation, real wage growth is modest, at around 1 percent, limiting improvements in household purchasing power. Rising industrial action, particularly in health and social care, further underscores underlying labour market tensions as employers and workers adjust to tighter fiscal conditions and slowing economic momentum. These updates take the RPI to 12 and the RPI-P to 30, meaning that economic activities continue to outperform market expectations in the UK.
Market Consensus Before Announcement
The ILO jobless rate expected unchanged in December from 5.1 percent in November. Earnings including bonus are seen up 4.6 percent after 4.7 percent in November.
Definition
The Labour Market Report covers a number of key areas of the jobs market. Unemployment is updated on the basis of two separate surveys: the claimant count, which measures the number of people claiming unemployment-related benefits, and the more reliable but lagging International Labour Organization's (ILO) measure that excludes jobseekers that did any work during the month and covers those people who are both looking and are available for work. Average earnings growth, a key determinant of inflation, is also updated.
Description
The labour market survey gives the most comprehensive report on how many people are looking for jobs, how many have them and what they are getting paid and how many hours they are working. These numbers are the best way to gauge the current state as well as the future direction of the economy.
The survey also provides information on wage trends, and wage inflation is high on the Bank of England's list of enemies. Bank officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Bank to maintain a more accommodative monetary policy. If inflation is a problem, the Bank is limited in providing economic stimulus - it must stay within range of its mandated inflation target.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it is a reasonable bet that interest rates will have to rise and bond and stock prices will fall. In contrast, when jobs growth is slow or negative, then interest rates are more likely to decline - boosting bond and stock prices in the process.