UNEMPLOYMENT remains at a four-year high of 5.1% as experts warn “we still carry the economic hangover of 2025”.
The UK unemployment rate for people aged 16 years and over was estimated at 5.1% in September to November 2025, the latest Office for National Statistics (ONS) jobs data released today has revealed. This is unchanged from the previous three months.
Vacancies in the UK for October to December 2025 have increased by 10,000 (1.3%) to 734,000 compared with July to September 2025.
Payrolled employees in the UK fell by 155,000 (0.5%) between November 2024 and November 2025, and decreased by 33,000 (0.1%) between October 2025 and November 2025.
When looking at September to November 2025, the number of payrolled employees fell by 135,000 (0.4%) over the year and by 43,000 (0.1%) over the quarter.
Payrolled employees for December 2025 decreased by 184,000 (0.6%) on the year, and by 43,000 (0.1%) on the month, to 30.2 million.
Annual growth in employees’ average regular earnings was 4.5% in September to November 2025. This is slightly down from the previous three-month period (4.6%).
The last time it was lower than 4.5% was in December 2021 to February 2022, when it was 4.3%.
Annual growth in total earnings was 4.7% in September to November 2025 – this is slightly down from the previous three-month period (4.8%).
Economic hangover of 2025
Riz Malik, Director at Southend-on-Sea-based R3 Wealth, said we are still feeling the effects of a stalled 2025.
He added: “We might be in a new year but we still carry the economic hangover of 2025. Nothing has happened to make employers eager to increase headcount and they will continue to find non human efficiencies. With more volatility emanating from across the pond we need a plan and we need it quick.”
Kate Underwood, Founder at Southampton-based Kate Underwood HR and Training, said the jobs market is resetting.
She continued: “UK hiring isn’t broken, it’s sobering up. Unemployment’s up and payroll headcount is down, so yes, businesses are cautious. But it’s not a cliff edge. Employment’s steady, vacancies have nudged up, and pay is still rising (just not racing).
“This feels like a reset, not a recession stampede. For 2026 I expect slower, smarter hiring. Less “growth for growth’s sake”. More “only if it pays for itself”. SMEs will keep roles tighter, test hires harder, and lean on part-time, fixed-term and contractors to stay agile. Bots? Use them, but don’t kid yourself they’re a magic money machine.
“Automate the boring admin, not the judgement calls. A bot won’t handle a grievance, calm a toxic manager, or protect your culture. And if tech replaces a role, you still need to run a proper redundancy process. No shortcuts. If you’re pausing hiring, shout louder about progression for the team you’ve already got. That’s how you stop your best people walking.”
UK hiring isn’t broken, it’s sobering up
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said AI is being increasingly used to make savings.
He added: “The rising costs of employing staff is driving a growing number of smaller businesses to use AI and outsourcing solutions to fulfill roles traditionally filled by local people who are now missing out on these opportunities.
“With minimum wage, National Insurance and pension contribution costs at their highest, along with increased company taxation, there is little incentive to employ and it’s inevitable unemployment will continue to rise over 2026.”
