ONS data shows payroll numbers fell by 33,000 in November as Labour unveils £1.5bn youth employment scheme
Generic photo of two people shaking hands after an interview(Image: Tima Miroshnichenko)
Tens of thousands of jobs have disappeared across Britain, new official figures reveal, whilst pay growth has also decelerated in further evidence of a faltering employment market. The Office for National Statistics (ONS) reported that payroll employee numbers declined by 33,000 in November, with provisional December estimates indicating a further reduction of 43,000 positions.
The latest statistics underscore the difficulties facing workers throughout the UK economy, with multiple business surveys forecasting continued job losses in the months ahead.
“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,” said Liz McKeown, director of economic statistics at the ONS.
The unemployment rate remained steady at 5.1 per cent, level with the preceding month. When Labour assumed office in July 2024, the rate stood at 4.4 per cent, as reported by City AM.
Job vacancy figures have remained “broadly flat” in recent months, with the latest three-month period recording a slight uptick following several quarters of contraction.
Regular earnings, stripping out bonuses, rose by 4.5 per cent in the three months to November. When bonuses were factored in, the figure reached 4.7 per cent.
Work and pensions secretary Pat McFadden drew attention to declining inactivity rates measured over a one-year timeframe. “Today’s figures show there are 513,000 more people in work compared to this time last year, but also highlights why we must go further, especially for our young people,” he said.
“That’s why are investing £1.5 billion to get hundreds of thousands of young people earning or learning, while former Health Secretary Alan Milburn is leading a review to help us get to the root of what is holding the younger generation back.
“Through our Jobs Guarantee launching this month we are helping young people find paid work placements, and we urge employers to come forward and join the likes of EON, JD Sports, Tesco and TUI who are already pledging their support.”
Shadow business secretary Andrew Griffith described the latest release as a “terrible scorecard for this government”.
The latest data could embolden Bank of England rate-setters who favour reducing borrowing costs at a quicker pace.
Policymakers at the Bank of England voted to reduce interest rates to 3.75 per cent at their final meeting of 2025, with discussions now under way regarding how many additional cuts might be implemented this year.
The majority of economists believe that moderating wage growth could encourage Monetary Policy Committee (MPC) members to support a further reduction in the first half of this year.
James Smith, UK economist at ING, said in a note on Monday that “rapidly” falling wage growth and rising unemployment would limit consumer spending, potentially weakening demand and letting inflation fall back to the Bank’s two per cent target at a faster rate.
Yael Selfin, chief economist at KPMG UK, said the latest ONS data “strengthens the case” for a measured approach to reducing interest rates.
“While the labour market continues to weaken, the more hawkish MPC members are likely to argue that there is no immediate sign of a significant deterioration in the labour market to warrant a faster pace of cuts,” Selfin said.
“However, with the labour market likely to weaken further, it should create room for interest rate cuts in subsequent meetings.”
Fresh inflation figures from the ONS are due to be published tomorrow morning.
McFadden sought to pre-empt new labour market statistics by revealing further details about the government’s proposed youth employment guarantee.
Through the scheme targeting unemployed young people, those aged 18 to 21 will receive fully subsidised paid work placements at firms including TUI, KFC, Leonardo Hotels and the Gym Group.
The initial phase will see more than 1,000 young people placed into positions across England, Scotland and Wales ahead of a nationwide expansion.
It forms part of government initiatives to address a crisis amongst ‘Neets’, young people not in employment, education or training. This news comes ahead of the release of the Alan Milburn review, which delves into the surge in Neets and strategies to combat youth inactivity.
The full set of recommendations from this review is anticipated later this year.
