The Work Foundation at Lancaster University responded to the labour market figures for September 2025 released by the Office for National Statistics. Ben Harrison, Director of the Work Foundation at Lancaster University commented:

“Today’s figures highlight the challenge the Government faces in turning the economy around as the labour market continues to show signs of cooling.

“Unemployment continues to creep up. It is now at the high level in just under four years at 4.7%, and up 194,000 on the year. Concerningly for Ministers seeking to create additional pathways to work, there are now more people looking for fewer available jobs – with 2.3 jobseekers per vacancy. And the risk remains that unemployment rises further in the months ahead.

“The cooling labour market has also impacted wage growth. Nominal wage growth slowed to 4.8%, which is the first time it has dipped below 5% for three years since June 2022. Worryingly, this period of consistent pay growth has not fed through to real wages. Workers remain only £24 better off since the start of the Financial Crisis in August 2008.

“The combination of stagnant living standards and sticky inflation means that people are still likely to feel pessimistic about their household finances one year into the new Parliament. Only half of workers (48%) believe wage increases are keeping up with the cost of living and just 43% expect an above inflation pay rise in the next 12 months.

“As the potential for tax rises looms at the upcoming Autumn Budget, Government must ensure it does not increase the pressure on lower income workers who have borne the brunt of this squeeze in recent years.”

Please note: Data is from Shifting Challenges (released 11 July 2025) – using data from a Survation survey of 3,796 workers aged 16-64 living in the UK. The fieldwork took place online between 2 and 12 May 2025).