Reactions to Labour Market Statistics release today - December 16

UK Labour Market December 2025

Department for Work and Pensions

Secretary of State for Work and Pensions, Pat McFadden said:

“There are over 350,000 more people in work this year and the rate of inactivity is at its joint lowest in over five years, but today's figures underline the scale of the challenge we've inherited.

“That is why we are investing £1.5 billion to deliver 50,000 apprenticeships and 350,000 new workplace opportunities for young people - giving them real experience and a foot in the door.

“To go further and tackle the deep-rooted issues of our labour market, Alan Milburn is also leading an investigation into the whole issue of young people inactivity and work.”

Background:

• • In 2025 so far, there are 363,000 more people in work. This has outpaced the increase in unemployment (up 280,000) over the same period. We've done this by encouraging investment, supporting key industries, and making it easier for businesses to hire.
  • Inactivity rate (21.0%) has fallen to its joint lowest level in nearly five years and is now at its joint lowest level since Jan-Mar 2020.
  • Unemployment is a historic issue, with the unemployment rate rising since July 2022.
  • Since July 2024, real wages have risen more than the first ten years of the previous government.
  • The number of people claiming unemployment benefits is falling. The claimant count (Nov.) is at 1.7m – down 56,000 (3.2%) on the year.  The claimant unemployment rate was 4.3% - down 0.2% points on the year.
  • The unemployment rate had increased by 0.6pts between May-Jul 2022 and Apr-Jun 2024. This was equivalent to an extra 225,000 more people in unemployment. Over the same period, the employment rate fell by 0.4%pts from 75.0% to 74.6%.
  • We want to incentivise businesses to back young talent – which is why we're offering relief on National Insurance contributions for employing anyone aged under 21 – and the Treasury has extended this scheme for another year.
  • As part of our strengthened Youth Guarantee, we've announced an £820 million funding package to overhaul support and give a generation of young people a brighter future – Almost a million young people to benefit from expanded support, new training, and work experience opportunities - GOV.UK
  • We are also investing an additional £725 million in the Growth and Skills Levy to drive up apprenticeships for young people and fully fund apprenticeship training costs for all eligible 16–24-year-olds - 50,000 more young people to benefit from apprenticeships as Government unveils new skills reforms to get Britain working - GOV.UK
  • Former Health Secretary Alan Milburn will lead on a report looking into drivers of rising number of NEETs and will consider health, skills, employment and welfare systems. Independent investigation to be launched to tackle rising youth inactivity - GOV.UK

Liberal Democrats

Responding to the latest unemployment figures that show unemployment rose to 5.1% in October, Lib Dem Deputy Leader and Economy Spokesperson Daisy Cooper said:

“The government says it's on the side of working people but it's workers and jobseekers who are paying the price of their failures.

“For people worried about their job, these figures are the last thing they want to see before Christmas. 

“From the jobs tax to the betrayal on business rates, businesses are struggling to stay afloat under the massive tax increases imposed by this Government which are making it more expensive to employ people.

“The Chancellor must take this as a wake up call and reverse the jobs tax before it can do any more damage.”

Institute of Directors

Responding to the latest ONS labour market data, Alex Hall-Chen, Principal Policy Advisor for Employment at the Institute of Directors, said:

"Today's data shows a further softening of the labour market, with the number of payrolled employees down 0.1% on the month and an increase in the unemployment rate to 5.1%.

"These figures are an indictment of the government's approach to employment policy; the combined effect of the Employment Rights Bill, employer's National Insurance increase, and above-inflation increases to the National Living Wage are stifling employer demand for labour.

"While the government's climbdown on day one unfair dismissal rights is a welcome step, this alone will not turn the tide on job creation. Significant movement on trade union reforms and guaranteed hours provisions, alongside measures to reduce the overall cost of employment, are needed to encourage employers to hire staff."

Conservative Party

Helen Whately MP, Shadow Work and Pensions Secretary, said:

“Losing your job is hard at the best of times, but in the run up to Christmas it's particularly cruel. But thanks to Labour's growth-killing policies, that's the sad reality for many people this Christmas. 

“Fourteen months in a row of higher unemployment means thousands of families will be struggling through the holiday season and without a steady income heading into the New Year.

“Even Labour's favourite think tank has blamed the Government's £26 billion National Insurance hike on rising unemployment. And their Unemployment Bill has made it harder than ever for businesses to hire people. 

“This all leaves hard-working families to subsidise those left on benefits. What's worse, the Chancellor's Benefit Budget has left those same people better off trapped on welfare, instead of reaping the rewards of employment. Only the Conservatives have the team and the plan to unleash businesses, grow the economy and get Britain working again.”

Andrew Griffith MP, Shadow Business and Trade Secretary, said:

“Unemployment has risen every single month since Labour came to office. And it's little wonder when they are pursuing a suite of anti-business policies that is sending employers to the wall.

“Rachel Reeves' Jobs Tax did damage enough. But now she is sending business rates soaring too – and we know the disastrous Unemployment Bill is following close behind, bringing with it more red tape, more costs for businesses and more union-led strike chaos.

“Labour do not understand business and ordinary people are paying the price for their incompetence. Only the Conservatives will give businesses the environment to grow and create jobs, including by abolishing business rates for thousands of high street firms.”

ENDS

Notes to Editors

• The latest ONS data has revealed another increase in unemployment, to 5.1 per cent [link].

TUC

The unemployment rate rose by 0.4% to 5.1% into the last quarter, employment fell 0.3% to 74.9% and inactivity is down 0.1 to 21.0%

• Payrolls fell by 171,000 on the year to November
• Youth unemployment is up to 13.4%, although youth inactivity is down from 32.6% to 30.1% compared to same quarter last year
• Vacancies have stabilised at 729,000
• Real pay growth is 0.9% against CPI inflation, down from 3.3% in the same period last year.

Commenting on the latest labour market figures, TUC General Secretary Paul Nowak said:

“When the economy starts to recover, the jobs market will follow – and it is welcome that vacancies now look to have stabilised. But with unemployment rising and real wage growth slowing, the priority must be boosting demand.

“This week, the Bank of England needs to support the economy with a further interest rate cut – making it easier for firms to invest and households to spend.

“And with the effects of the recent economic slowdown continuing to feed into the labour market, it is vital that those who are out of work get the help they need.

“Experience of real work is best way to help young people who are starting out, and the new youth guarantee can be a major step forward for improving young people's prospects.

“Young and disabled workers also need world class public services to give them the support and help they need to move into and stay in work, which is why ongoing government investment is so important.

“And they need good secure jobs with decent prospects, including notice of their shifts and sick pay when they're ill. This kind of security allows people to move into and stay in jobs rather than cycling between insecure zero hours work and unemployment.

“Let's be clear – good quality jobs are the foundation of a strong economy, and go hand in hand with high productivity growth. That's why the Employment Rights Bill is so important.”

British Chambers of Commerce

Reacting to the latest labour market data from the ONS published this morning, Jane Gratton, Deputy Director of Public Policy at the British Chambers of Commerce said: 

“The latest data paints a gloomy picture for jobs, opportunities and growth. It reflects what businesses tell us – they are less confident about hiring staff due to sky-high employment costs and a tidal wave of new employment legislation coming down the track.    

“While there has been some easing of cost pressures - with average earnings including bonuses slowing to 4.7% in the three months to October - labour costs remain a challenge.  Nearly three quarters (72%) of businesses in our latest survey said labour costs are the biggest cost pressure they are facing.      

“There is a limit to how much additional cost firms can absorb without an impact on investment and growth. The further increase in unemployment, hitting 5.1% in October, is also a clear sign of the sluggish economy.   

“We need a laser like focus on stimulating growth and boosting investment, trade, innovation and skills. The Government must work in partnership with business to make 2026 a year of delivery.”