Sluggish wage increases in the UK suggest a possible interest rate reduction this spring

Insights from the Latest UK Employment Data

The newest employment figures from the UK reveal that the jobless rate held steady at 5.1%. Although a brief decline was anticipated, this figure is still higher than the 4.4% recorded at the beginning of last year. The private sector saw payrolls shrink by 55,000 positions—a significant drop, though this number could be adjusted in future reports. Overall, non-government employment decreased by over one percent in 2025.

On a more positive note, November saw a slight reduction in the redundancy rate. Additionally, concerns that late-2024 layoff notifications to authorities were on the rise now seem to have been unfounded. In summary, the labour market continues to lose momentum, but the slowdown remains gradual, with hiring activity still subdued.