UK unemployment rates rise again, as the number of PAYE employees falls to 30.2 million in May, Labour Market figures show.
This morning, the Office for National Statistics released Labour Market and PAYE figures revealing a 4.6% unemployment rate in February to April 2025 and a 0.9% fall in the number of payrolled employees in May.
This release comes ahead of the Labour Government’s first spending review, scheduled for tomorrow.
In the UK, the unemployment rate continuously increased during the coronavirus pandemic, returning to pre-pandemic levels in 2021. However, since mid-2022 this rate has been largely increasing again, seeing a rise of nearly 2%.
Unemployment was highest in London at 6.4% and lowest in the South West and Northern Ireland, at 3.4% and 1.8% respectively.
Additionally, PAYE statistics show a decline in the number of employees by 274k in May, compared to the previous year. The accommodation and food service activities sector registered the highest fall with 124k fewer employees.
The early estimates for May also show that the median monthly pay increased by 5.8% over the year to £2,521. In April, mean monthly pay was £3,343 and the aggregate pay was £101.2 billion.
The data team at Polimapper has visualised PAYE statistics by local authority*.
Birmingham and Leeds saw the highest number of payrolled employees in May, at 461k and 372k.
The highest median pay in the month was seen in the London areas of the City of London (£5,951), Wandsworth (£3,820), and Westminster (£3,732). Explore statistics in your area below.
About the map
The visualisation below shows Earnings and employment from PAYE statistics by local authority in the UK*.
To view statistics in your area double click on the map or click here to launch the full page version.
*Data converted from LAU to LA boundaries.
Geodata context
On the eve of the government’s first spending review, the ONS’ statistics come as a blow to chancellor Rachel Reeves, with commentators blaming labour market trends on rising national insurance contributions and living wages.
Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales: “These figures suggest that the UK’s jobs market took a damaging hit from ‘Awful April’, with the tough reality of sharply rising NICs and national living wage costs pushing more employers to cut staff.”
“The UK’s labour market is in a painful period with eye-wateringly high business costs likely to mean more job losses this year, particularly if the spending review increases the odds of more tax hikes in the autumn budget.”
Neil Carberry, chief executive at Recruitment and Employment Confederation (REC): “These figures remind us of the old adage that the jobs market shadows the economy, a few months behind. A tough winter, as firms struggled to grow was compounded by increases in NI, the tax on jobs. More recent employer surveys are somewhat more hopeful, but these figures emphasise again the need for the government to support businesses through a truly effective industrial strategy. Making sure that unnecessary additional burdens on hiring are removed from the Employment Rights Bill will be vital, especially as today’s numbers suggest more workers who were previously inactive are trying to return to work.”
Alex Hall-Chen, principal policy advisor for employment at the Institute of Directors: “Our own data shows that the measures contained in the Employment Rights Bill have made almost half (49%) of business leaders less likely to hire new staff and a third (36%) more likely to outsource roles to other countries.”
“Government must urgently show that it is listening to the concerns of business about the consequences of the Bill as it is currently drafted. As the Bill continues its passage through the House of Lords, we are calling for targeted changes to the Bill to restore business confidence in hiring and investment in staff in the UK.”