The UK's job market is showing signs of deepening trouble, with official figures revealing a continued slowdown in wage growth and unemployment holding at a near five-year high, particularly impacting the retail and hospitality sectors.
According to the Office for National Statistics (ONS), average regular earnings growth dipped to 4.5 per cent in the three months leading up to November, a slight decrease from 4.6 per cent in the prior quarter and marking the lowest rate since April 2022.
When adjusted for Consumer Prices Index inflation, real wages saw a modest 0.9 per cent increase.
The revised estimate of payrolled workers in November 2025 shows a decrease of 33,000 from October 2025, and provisional estimates for December 2025 show a further decrease of 43,000.
— Office for National Statistics (ONS) (@ONS) January 20, 2026
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The ONS also reported that the UK unemployment rate remained static at 5.1 per cent over the latest three-month period. Furthermore, an estimated 43,000 fewer employees were on payrolls in December, with the hardest-hit industries being retail and hospitality.
ONS director of economic statistics Liz McKeown said: “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.”
She added: “While there was a slight increase in vacancies in the latest period, the overall number has remained broadly flat over the last six months, following a long decline.
“Wage growth in the private sector has slowed to its lowest rate in five years while public sector wage growth remains elevated reflecting the continued impact of some pay rises being awarded earlier than they were last year.”
