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Dr Sangwoo Lee on the Latest ONS Employment Statistics

Commenting on today’s Office for National Statistics figures, Dr Sangwoo Lee, a Research Fellow at the Warwick Institute for Employment Research, The University of Warwick, said:

“The latest UK labour market presents a mixed but increasingly concerning picture as structural pressures intensify. The unemployment rate rose to 4.6% in February-April 2025, up from 4.4% quarterly and marking the highest level since Q1 2021. The employment rate improved modestly to 75.1%, with economic inactivity declining to 21.3%.

“Beneath these mixed headlines, underlying conditions deteriorated sharply. Payrolled employees decreased by 109,000 (0.4%) in May 2025, with an annual decline of 274,000 (0.9%) to 30.2 million. Vacancies fell by 63,000 to 736,000, marking the 35th consecutive quarterly decline and sitting 59,000 below pre-pandemic levels.

“The simultaneous annual rise in both employment (+667,000) and unemployment (+115,000) reflect people re-entering the labour force from inactivity. However, the contrast with declining payrolled employees suggests traditional employment relationships are contracting even as labour force participation increases, indicating deterioration in employment quality. The divergence between household survey employment gains and administrative payroll losses suggests people are increasingly finding work in non-traditional arrangements rather than stable, payrolled positions.

“Looking ahead, this structural transformation is likely to accelerate through 2025, with the employment-unemployment divergence potentially widening as traditional job creation lags behind labour force growth, necessitating policy frameworks designed for a fundamentally different employment landscape.”

ENDS.