The latest ONS Labour market overview show that: - The unemployment rate increased from the previous quarter to 4.7% - up to 1.673 million people unemployed.
- Unemployment amongst young people aged 18-24 has fallen by 0.5% on the quarter but remains high at 12.2%.
- The employment rate increased slightly to 75.2%, 34.1 million people in employment. This is up on the quarter and the year.
- The economic inactivity rate is slightly down on the quarter at 21% and 375,000 lower than 12 months ago.
- 9.085 million people are economically inactive, lower than last year but 549,000 higher than pre-pandemic levels.
- Vacancies fell to 727,000, the 36th consecutive quarterly decline with vacancies decreasing in 14 of the 19 industry sectors.
- The early estimate of payrolled employees for June 2025 decreased by 178,000 (0.6%) on the year and by 41,000 (0.1%) on the month to 30.3 million
- Annual growth in regular pay for both with and without bonus was 5%. Adjusted for inflation, annual growth in regular pay was 1.1% and total pay was 1%.
- The claimant count increased on the month and on the year to 1.743 million. This is the measure of those receiving benefit principally due to being unemployed.
- Redundancies increased to 3.9 per thousand employees, slightly down on last quarter but 0.5 per thousand up on 12 months ago.
- 37,000 working days were lost because of labour disputes in May 2025, 10,000 fewer than the previous month.
Indeed’s Hiring Lab Mid-Year Labour Market Update shows the labour market continues to soften but hasn’t crashed since April’s policy changes came into effect. Key trends include: - Modest decline in hospitality/retail job postings
- Scarcity of graduate roles
- Reduced use of zero-hours contracts
- Continued demand for remote/hybrid jobs
- Growth in GenAI job postings
The Government has launched the UK’s Modern Industrial Strategy, outlining a 10-year plan to position the UK as the most attractive country in the world for investment. A core element of the strategy is to enhance skills and widen access to talent by reforming the skills and employment support system. This includes a specific focus on eight growth-driving sectors (the “IS-8”), which includes Agri-Tech, though notably excludes the broader food and agriculture sectors. The latest Business Owners Sentiment Survey Spring 2025 conducted by professional services group S&W found that 20% of businesses had already reduced their staff headcount as a direct result of NIC changes announced in the October 2024 Budget, and that an additional 33% are planning to make further job cuts. A quarter (24%) of those surveyed have reduced workers’ hours, and a further 35% plan to, and 22% have frozen pay, with another 29% planning to. Recruitment freezes have taken place for 21% of those surveyed, while a further 35% plan to pause hiring. The Government has launched a commitment to recruit 100,000 more construction workers per year by the end of the Parliament. Jobcentres will work closely with the construction industry to offer work experience and tailored placements to meet the need of employers and people looking to work in construction. The Resolution Foundation’s Low Pay Britain 2025 report shows major progress on low pay due to minimum wage increases. The focus is now shifting to job quality. Tackling hours insecurity through the Employment Rights Bill, it suggests the following: - Low hours contracts should be 25 hours per week
- Reasonable notice for cancellation of shifts should be two weeks
- Compensation for cancellation of shifts with less than two weeks’ notice should be on a sliding scale with less than 24 hours’ notice full shift paid
The Resolution Foundation’s Low Pay Britain 2025 report shows major progress on low pay due to minimum wage increases. The focus is now shifting to job quality. Tackling hours insecurity through the Employment Rights Bill, it suggests the following: - Low hours contracts should be 25 hours per week
- Reasonable notice for cancellation of shifts should be two weeks
- Compensation for cancellation of shifts with less than two weeks’ notice should be on a sliding scale with less than 24 hours’ notice full shift paid
The CIPD Good Work Index 2025 reports that while pay satisfaction is stable, flexibility, autonomy and line manager relationships significantly influence employee well being and performance. The Work Foundation's research shows one in five workers report poor health, with many citing the need for more flexible or less stressful roles. Protect's whistle blowing research shows Gen Z are significantly less likely to report concerns, even in cases of health, safety or harassment. A full review of parental leave and pay has been launched, covering maternity, paternity, and shared leave. This delivers on the Plan to Make Work Pay and is aligned with the Women and Equalities Committee’s report Equality at Work. The Institute for Policy Research at the University of Bath has recommended six weeks of well-paid leave for fathers to support gender equality and family wellbeing, with estimated benefits of up to £12.8 billion annually. The Department for Work and Pensions (DWP) has announced £103.6 million in funding for the Connect to Work programme in Kent & Medway, Gloucestershire, Hertfordshire, and Greater Lancashire. Nearly 30,000 people with health conditions, disabilities, or other barriers will be supported into work. The WorkWell Primary Care Innovation Fund, backed by £1.5 million, will pilot employment support via GPs in 15 regions, aiming to reduce pressure on doctors while improving return-to-work outcomes. In addition, the government has published its 10 Year Health Plan, Fit for the Future which sets out ambitious plans to boost mental health support across the country, helping get people the care they need so they can get back to work, school and doing what they love. The Government’s latest data shows that 6,700 more mental health workers have been recruited since July, which is more than halfway towards its target of hiring an extra 8,500 by the end of the Parliament. New research from IRIS Software Group shows that 3 in 5 Brits are threatening to quit if employers roll back Equality, Diversity and Inclusion (DEI). Gen Z is the generation most likely to threaten to quit (68%), followed by Millennials (64%) and Gen X (47%). More than a third (36%) of those in Gen X say that a rollback of DEI policies would not influence their decision to join or stay with a company. Young people are encouraged to use the HMRC app to access tax and employment history details to support job applications. Over 1.2 million under-25s have already downloaded the app. UK Immigration Policy The Home Office has announced new rules to be laid in Parliament which will see skills and salary thresholds rise, overseas recruitment for care workers end, and more than 100 occupations no longer granted access to the immigration system. The Home Office has announced new rules to be laid in Parliament which will see skills and salary thresholds rise, overseas recruitment for care workers end, and more than 100 occupations no longer granted access to the immigration system. These changes, the first to be rolled out from the Immigration White Paper, represent a fundamental shift in the UK’s government’s approach to immigration and restoring order to the points-based system, focusing on higher skills, lower numbers and tighter controls. They say this is an important step in ending the UK’s reliance on overseas, lower skilled recruitment. The Committee for Public Accounts which scrutinises government spending has published its report on Immigration: Skilled worker visas. The report finds that the Home Office has failed to keep track of whether people who entered the UK on the skilled worker visa have left the country or remained to work illegally. The committee recommends that the Government “set out a clear method of assessing what happens when visas come to an end, specifically what measures are in place or will be put in place to record when people leave the country”. |
The Home Secretary, Yvette Cooper, has written to the Migration Advisory Committee (MAC) to formally commission the MAC to review two key areas in relation to work visas: - A review of salary requirements including discounts for the Skilled Worker visa route. The government want the salary thresholds to rise to ensure international recruitment is not a cheap alternative
- A review of the Temporary Shortage List (TSL). Occupations below RQF6 can appear on the expanded Immigration Salary List or the interim TSL. Both are temporary measures whilst the MAC carry out the review. In future, only jobs that the MAC advise are justified and meet the requirements will be include on the TSL
The UK and France have announced a major deal to crack down on illegal Channel crossings. A new pilot scheme will see small boat arrivals being returned to France then an equal number of migrants will be able to come to the UK from France through a new legal route – fully documented and subject to strict security checks. |
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The Migration Observatory reports on Labour’s pledges on migration, one year in: the data, looking at progressing against the five pledges: - Bringing net migration down – net migration has fallen by 52% from its peak to 431,000 in 2024 mainly due to changes to visa rules by the previous government
- Reduce reliance on overseas workers – skilled worker visa grants have fallen sharply in 2024, particularly among health and care workers who are not allowed to bring partners with them
- Reducing small boat arrivals – these have significantly increased in the first year of Labour government
- Clearing the asylum backlog – the asylum backlog declined in the first months of 2025, but the appeals backlog increased sharply
- Increasing returns – total returns has increased by 25% in 2024 to the highest level since 2017
The Migration Observatory has also published a briefing Migrants in the UK labour market: an review provides data on migrants’ labour market integration and the jobs they do in the labour market. |
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