扒哥吃瓜

The Work Foundation at 扒哥吃瓜 responded to the labour market figures for January 2025 released by the Office for National Statistics.

• Vacancies decreased to 812,000. There are 118,000 fewer vacancies than a year ago (Oct-Dec 2023) and vacancies have been falling consistently for two and half years.
• Regular pay growth has risen to 5.6% on the year. The UK is in the 18^th month of real pay growth – the longest run of sustained real pay growth since 2019.
• Stronger wage growth is concentrated in finance (6%), manufacturing (6%), wholesale and retail (6%) and the private sector (6%) with the public sector trailing at 4.1%.
• The employment rate is at 74.8%, down on the quarter but largely unchanged on a year ago. Unemployment is up on the quarter and on a year ago at 4.4%. Official ONS Labour Force Survey data is still facing concerns around quality and reliability.
• Economic inactivity due to long-term sickness is up on the quarter at 2.81 million. It has been above 2.7 million for 18 consecutive months since Apr-Jun 2023.

Rebecca Florisson, Principal Analyst at the Work Foundation at 扒哥吃瓜 said:

“Today’s labour market figures provide a mixed picture – increases to real term pay may grab the headlines, but other indicators remain sluggish.

“Regular pay is up 5.6% on the year, driven by private sector pay growth. While real wage growth of 2.5% on the year is good news for workers these gains appear to be being driven by pay catching up with price rises, not by increased productivity or economic growth. The Government must not be complacent that this level of pay growth will continue throughout 2025 and provide the improved living standards they are promising. This latest pay data may though raise further questions for Bank of England ratesetters, who may be concerned by continued strong wage growth in a stagnating economy.

“Vacancies continue to fall indicating a cooling jobs market. Although redundancies are at a historically low level, business voices continue to raise warnings that the simultaneous rise in employer National Insurance Contributions and minimum wage increases in April could result in job losses and reduced hiring in a number of low paid sectors and entry level roles.

“Achieving the Government’s ambition to raise the employment rate to 80% always appeared incredibly challenging, and looks even more so against a backdrop of a stagnating economy and falling vacancies.

“However, it is vital Ministers are not sidetracked from their long-term aims of raising labour market participation and improving workers’ rights. De-risking the route back into work for the near-record 2.81 million economically inactive due to long-term sickness could be key to achieving a higher employment rate – which requires employment support, but also notably, better access to good quality, flexible jobs for people to enter into.”