The UK labour market remained steady in early 2025 despite economic uncertainty, according to the latest data from Indeed.
As of 14 February, UK job postings were 15 percent below their pre-pandemic baseline, maintaining levels similar to those seen before last October’s Budget. Hiring demand showed resilience, with a typical January rebound following the holiday slowdown.
Despite stabilising, UK job postings continue to lag behind other major economies, including Australia, Canada, France, Germany and the US, where hiring demand remains above pre-pandemic levels. Businesses have expressed concerns over upcoming policy changes in April, including a National Insurance increase and a minimum wage rise, but there has been no significant increase in job cuts so far.
Official vacancy data also reflects a stabilisation in hiring activity, suggesting businesses are maintaining recruitment efforts for now. However, with cost pressures set to rise, the long-term impact on employment remains uncertain.
Hiring Rebound Shows Labour Market Strength
Job postings typically decline in December before rising in January as businesses restart recruitment efforts. This year followed the same trend, with job postings recovering to early-December levels by early February. Some sectors saw particularly strong hiring activity, including childcare, legal and marketing. Public sector roles, such as education, instruction and nursing, also experienced notable increases.
In contrast, hiring remained weak in retail-related roles, with job postings for driving, loading and stocking and retail positions continuing to decline. Personal care, home health and community and social service roles also experienced lower demand.
The latest official labour market data indicates continued high wage growth, with pay rising by around 6 percent in December. The Indeed Wage Tracker shows similar trends, reporting 6.1 percent year-on-year wage growth in January. While wage growth has moderated slightly from previous peaks, it remains well above the Bank of England’s 2 percent inflation target.
Annual wage growth in the UK is also running at roughly twice the pace seen in the US and the Euro area. For workers, this has helped restore purchasing power following a period of high inflation, with annual real terms pay growth at 3.4 percent.
Redundancy Notifications Remain Low
Despite concerns over potential job losses, redundancy notifications have not shown a significant increase. Employers planning more than 20 redundancies are required to notify the government at least 30 days in advance, but current notification levels remain stable.
Jack Kennedy, Senior Economist at Indeed, said, “The UK labour market has shown resilience at the start of the year, with job postings rebounding in January following the usual holiday slowdown. While hiring demand remains below pre-pandemic levels and economic uncertainty persists, the relative stability of job postings, continued modest redundancy notifications and robust wage growth indicate a labour market that certainly faces strong headwinds but hasn’t buckled thus far.”
Kennedy added that the key concern is how the labour market will respond to April’s policy changes.
