What the Latest ONS Figures Mean for the UK Labour Market – June 2025
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UK labour market trends 2025 point to an easing market, with ONS data for June showing unemployment rising to 4.6% and vacancies declining to 736,000.
Despite this, employment remains strong and wages continue to outpace inflation. The shift reflects cooling demand rather than decline, creating a more balanced hiring environment where employers gain slightly more control while skilled candidates remain in demand across key sectors.
What the Latest UK Labour Market Trends Mean for 2025
The Office for National Statistics has released its latest labour market overview for June 2025, with several key indicators shifting.
Unemployment has risen to 4.6%, vacancies have fallen to 736,000, and pay growth remains strong at 5.2% annually.
While often described as “easing”, UK labour market trends in 2025 remain resilient by historical standards.
The UK Labour Market June 2025 Scoreboard
- Employment Rate (16–64): 75.1% — most working-age adults remain employed, with slight quarterly improvement
- Unemployment Rate: 4.6% — a modest increase, but still low compared to long-term averages
- Economic Inactivity: 21.3% — more individuals are returning to the workforce
- Vacancies: 736,000 — hiring demand is softening but remains above pre-pandemic levels
- Pay Growth: 5.2% — wages continue to outpace CPIH inflation, supporting real income growth
Why UK Labour Market Trends Are “Easing” in 2025
The shift reflects a gradual rebalancing between employers and candidates.
Vacancies are declining while more candidates re-enter the workforce, reducing the intensity of competition seen in previous years.
This transition signals stabilisation rather than downturn.
Is an Easing Market a Concern?
- Still historically strong: unemployment remains below long-term averages
- Real wage growth: earnings continue to exceed inflation
- Vacancies remain elevated: demand for talent is still above pre-2020 levels
What is Driving the Shift?
Interest Rates. Higher borrowing costs are slowing business expansion and reducing new hiring demand.
Workforce Re-Entry. More individuals are returning to the labour market, increasing candidate availability.
Cautious Hiring. Employers are prioritising replacement hires over expansion.
Sector Insights Within UK Labour Market Trends 2025
Professional Services and Technology. Vacancy growth has slowed following rapid expansion in previous years.
Engineering and Energy. Technical roles remain in high demand, particularly across infrastructure and energy projects.
Hospitality and Retail. Hiring demand remains steady, though wage growth is moderating.
What This Means for Employers
- More choice: a broader candidate pool allows more selective hiring
- Balanced salary expectations: pay inflation is stabilising but remains competitive
- Candidate experience remains critical: employer reputation continues to influence hiring success
- Opportunity to hire strategically: businesses can secure talent ahead of the next growth cycle
What This Means for Job Seekers
- Increased competition: larger applicant pools require stronger differentiation
- Continued pay growth: opportunities remain for real income improvement
- Evidence-led applications: demonstrating measurable impact is essential
- Flexibility is advantageous: openness to sectors and locations improves prospects
If you’re actively job hunting in this environment, our latest job search and interview tips cover how to stand out in a more competitive applicant pool.
Outlook for the Rest of 2025
Key indicators to monitor include vacancy trends, wage growth and interest rate decisions.
Stabilisation in these areas could signal a balanced and sustainable hiring environment. For a sector-specific view, our 2026 energy sector outlook looks at what these UK labour market trends mean specifically for energy hiring.
Practical Steps
For employers:
- Review salary benchmarks against current market data
- Maintain efficient hiring processes
- Strengthen employer branding
- Build talent pipelines
For job seekers:
- Quantify achievements clearly
- Research salary expectations — our energy sector salary guide is a useful starting point
- Maintain professional visibility
- Invest in upskilling
Next Steps
UK labour market trends in 2025 point to a transition from peak demand to a more balanced state.
Both employers and candidates who adapt to this shift will be best positioned for success.
Astute supports organisations and professionals with data-driven recruitment insights and market expertise. Get in touch to discuss what these trends mean for your hiring or career plans.