REC response to ONS labour market figures, August 2025

The ONS published its latest labour market figures this morning. The Recruitment and Employment Confederation (REC) Deputy Chief Executive Kate Shoesmith said:

“The labour market remains challenging, with many businesses maintaining a cautious approach to hiring. But if we are to harness the optimism businesses tell us they have for future recruitment later this year, we will need the Autumn Budget to offer employers a bit more bandwidth on costs.

“The resilience of the UK labour market is apparent in today’s official statistics, with the number of people in work slightly up and unemployment only slightly higher than in the previous quarter. Tackling economic inactivity, which saw a fall over both the quarter and the year, remains the single greatest challenge for this government if they are to ever achieve their goal of 80% employment.

“Our labour market picture is mixed. Construction and blue-collar industries are showing a gentle return to hiring, which is often a strong indicator for the wider economy, alongside sustained demand for engineering skills. But hospitality and retail saw a slow start to the summer amid cost headwinds.

“With pay growth steadying overall after a volatile few years – prompted in part by inflating-busting rises in national minimum wage rates – now is the time for pragmatism from the Low Pay Commission before they make any further decisions on pay rates, and as the Bank of England continues to monitor interest rates closely. Business cannot afford further cost rises.”