The unemployment rate in the United Kingdom rose to 5% for the three monthly period ending in September. The level is the highest since December 2020 to February 2021. With the latest figures from the Office for National Statistics (ONS) now out, these figures are starting to paint a very troubling picture of the labour market. Despite the overall decrease in payrolled employees, job openings are flat.
Liz McKeown, the director of economic statistics at the ONS, stated that these figures clearly indicate a weakening labour market. The unemployment rate has skyrocketed past record highs. Analysts had originally forecast it to go up to just 4.9% ahead of the November 26th Budget.
The report shows an historic loss of payrolled employees. Compared to the same three month period a year ago, the number was down by 109,000, or 0.4%. This drop is a signal that employers are showing increased reluctance to hire in the face of economic headwinds.
Combined, these numbers indicate a softening labour market. The unemployment rate has risen in the most recent quarter to a post-pandemic level. The level of job vacancies, on the other hand, is essentially flat,” maintained McKeown.
Even with the headwinds on our labor market, average wage growth has proven unexpectedly robust. In the last quarter of 2022, average wages grew by 4.6%. That’s a decrease from the 4.7% growth seen in the three months ending in August. Wages are increasing, but wages won’t match the skyrocketing costs of living, especially with inflation. As winter approaches, the situation is getting dire for so many.
According to the ONS, job vacancies were unchanged from August to October 2025. Over this same period, there were about 723,000 job openings. This retention of job openings is an odd juxtaposition to the sharp downtrend in employment and uptick in unemployment rate.
Pat McFadden MP, a leading politician on death and serious injury reduction, said he was alarmed to see the latest figures but remarked on some encouraging trends. “Over 329,000 more people have moved into work this year already, but today’s figures are exactly why we’re stepping up our plan to get Britain working,” he stated.
These labour market conditions are a picture of the continued economic uncertainty that persists for employers and job seekers alike. Rising unemployment and record-high, stagnant job vacancies are twin crises. Policymakers should pursue policies that both incentivize the creation of new jobs and help people find and get those jobs.