The Work Foundation at Lancaster University responded to the labour market figures for February 2025 released by the Office for National Statistics. Rebecca Florisson, Principal Analyst at the Work Foundation at Lancaster University commented:

“Today’s figures point to a slowing labour market, with worrying signs for young people entering the labour market for the first time.

“On the face of it, there is good news for workers as regular pay is up on the year by 5.9%, with real wages also up by 2.5% on the year. Although this represents the longest run of regular pay rises above 4% since records began in 2001, the reality is most workers have not felt the benefit in their pockets. Falling GDP per head suggests that despite wage increases, living standards are not significantly improving.

“While low by historical standards, unemployment is continuing to creep up to 4.4%. There are now 213,000 more people out of work than a year ago. This is worrying for young people, with an additional 136,000 people aged 16-24 now unemployed – making up two thirds of new jobseekers.

“It also appears many employers are scaling down plans to recruit staff, just at the time when the Government is attempting to support more people into work. Vacancies have dropped by 110,000 on the year. This reduced appetite for hiring has emerged even prior to the introduction of the Government’s rise in employer National Insurance Contributions.

“However, for a Government promising to raise living standards it is more critical than ever that Ministers prioritise the measures outlined in the Employment Rights Bill, the Industrial Strategy and Get Britain Working White Paper. Any delay or dilution of their introduction will only further exacerbate the issues facing workers and job seekers, and increase the sense of uncertainty amongst employers as to the landscape within which they will be operating in the future.”

Notes: 35-month run of above 4% pay growth is based on Average Weekly Earnings (nominal) - Regular Pay (Great Britain, seasonally adjusted) three-month average.