“These figures indicate that the UK’s labour market ended 2025 in poor health as skyrocketing staffing costs and concerns over the Employment Rights Bill increasingly hampered hiring and limited pay awards.
“Though this slowdown in wage growth should gather pace in the coming months as elevated employment costs increasingly restrain pay settlements, it’ll be at the expense of weaker consumer spending – an essential driver of UK economic output.
“The UK jobs market is in a more problematic phase with spiralling labour costs likely to mean notably higher unemployment, with entry level roles most vulnerable given their greater exposure to increased automation and the looming minimum wage rise.
“Though these discouraging figures will reinforce fears among policymakers over the health of the economy, the speed at which the jobs market is deteriorating is unlikely to be enough to trigger an interest rate cut next month.”
ENDS
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Chartered accountants are talented, ethical and committed professionals. ICAEW represents more than 210,000 members and students around the world. 98 of the top 100 global brands employ ICAEW Chartered Accountants.* 87% of FTSE 100 companies, and 81% of FTSE 250 companies in the UK, have an ICAEW member on their board.
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* includes parent companies. Source: ICAEW member data March 2025, Interbrand, Best Global Brands 2024.
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