UK payrolls fall by largest amount in five years as wage growth slows
The UK jobs market weakened in December as payrolls fell by 43,000. Slower wage growth may allow the Bank of England to maintain its current interest rates.
Insights:
The labor market in the United Kingdom 
GBsignaled a notable cooldown as new figures from the Office for National Statistics revealed that payrolled employment dropped by 43,000 in December 2025. This represents the largest monthly decline since November 2020. Simultaneously, a previously reported fall of 38,000 for November 2025 was revised to show a decline of 33,000 people in payrolled employment. While these preliminary figures are subject to future revisions, the data underscores a weakening trend in the national workforce.
GBsignaled a notable cooldown as new figures from the Office for National Statistics revealed that payrolled employment dropped by 43,000 in December 2025. This represents the largest monthly decline since November 2020. Simultaneously, a previously reported fall of 38,000 for November 2025 was revised to show a decline of 33,000 people in payrolled employment. While these preliminary figures are subject to future revisions, the data underscores a weakening trend in the national workforce.Wage growth has also decelerated significantly, providing the Bank of England with evidence that inflationary pressures are subsiding. Private sector wage growth, excluding bonuses, slowed to 3.6% in the three months to November 2025, which is the slowest pace since late 2020 and a decrease from the 3.9% recorded in the three months to October 2025. Overall core pay growth followed a similar trajectory, slowing to 4.5% in the September-to-November 2025 period compared with a year earlier, down from 4.6% in the three months to October 2025. The central bank has been closely monitoring wage growth as a gauge of how long Britain's still-high inflation rate is likely to persist.
