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\t\tThe UK jobs market is struggling, new figures have suggested.\t<\/p>\n\t\t\tTuesday 16 September 2025 7:58 am
\n\t\t\t\t\t\u00a0|\u00a0\u00a0Updated:\u00a0<\/p>\n
\t\t\tTuesday 16 September 2025 7:59 am\n\t<\/p>\n
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\t\tThe UK jobs market is struggling, new figures have suggested.\t<\/p>\n
The collapse of the UK jobs market has deepened<\/a>, according to official data, undermining the Labour government\u2019s goal to boost employment.\u00a0<\/p>\n Firms continued to shed workers as the number of payrolled employees dropped by 6,000 in July, adding to a collapse of 142,000 over the year.<\/p>\n Provisional estimates suggest there was a fall of 8,000 payrolled employees in August while the unemployment rate was still 4.7 per cent.<\/p>\n The further decrease in job numbers will send a warning to Rachel Reeves two months before the\u00a0Autumn Budget, with the Treasury expected to be tasked with finding around \u00a330bn, mainly through tax hikes.\u00a0<\/p>\n Top economists and business groups have pointed out the impact of lowering the salary threshold on employers\u2019 national insurance contributions (NICs) last autumn on firms\u2019 ability to hire more workers.\u00a0<\/p>\n The British Chambers of Commerce <\/a>(BCC)\u2019s Shevaun Haviland and leaders at several industry groups have called on Labour to avoid imposing more damaging taxes on companies.\u00a0<\/p>\n<\/p>\n High wage growth to boost state pension<\/p>\n Wage growth excluding bonuses in the three months to July eased to 4.8 per cent, which matched market forecasts, while pay growth including bonuses was 4.7 per cent \u2013 threatening the Bank of England\u2019s ambition to\u00a0bring inflation down<\/a>\u00a0and engineer a \u201csoft landing.\u201d<\/p>\n Figures from the previous month showed that wages rose by five per cent over a three-month period, according to the Office for National Statistics (ONS).\u00a0<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tWage growth hits five per cent as more jobs shed<\/a><\/p>\n Fresh data means the state pension is set to rise by 4.7 per cent as July wage growth figures are used to calculate the increase.\u00a0<\/p>\n The triple lock uprating policy means the pension increases by whichever is highest out of wage growth in July or inflation in September.\u00a0<\/p>\n With wage growth including bonuses rising by 4.7 per cent in July, it means pensioners will earn \u00a312,534.60 per year from next April.\u00a0<\/p>\n They could also be set for a state pension that is higher than the personal allowance offered to working Brits from 2027, according to analysis by AJ Bell\u2019s head of public policy Rachel Vahey.<\/p>\n Vahey said the Treasury now faces a difficult battle in managing the extra cost worth billions from higher state pensions and whether it can sustain the triple lock.\u00a0<\/p>\n \u201cRemoving the freeze on the personal allowance would come at significant cost to the Treasury at a time when the chancellor\u2019s fiscal headroom is already strained at best, while an overhaul of the triple lock would come with huge political risk before the next general election,\u201d Vahey said.<\/p>\n Jobs market clashes with inflation risks<\/p>\n Rachel Reeves and Keir Starmer\u2019s economic advisers on a \u201cBudget board<\/a>\u201d are reportedly considering welfare reforms to encourage inactive Brits to get into work while a focus on the cost of living is a part of preparations for this year\u2019s statement.\u00a0<\/p>\n The Budget and its resulting economic effects will be analysed by Bank of England officials, who raised the alarm on the inflationary risks of last year\u2019s tax hikes and pressures it added to the jobs market as a whole.\u00a0<\/p>\n