UK Labour Market Slows in November 2025—What It Means for the Pound and Forex Traders
UK Employment Falls Amid Signs of Slowing Wage Growth
The latest labour market overview for the UK shows that employment is softening, with payrolled employees falling by 117,000 (0.4%) year-on-year between September 2024 and September 2025, and a monthly decline of 32,000 (0.1%) from August to September 2025. Early estimates for October 2025 point to a further decline of 180,000 (0.6%) year-on-year, bringing total payrolled employees to 30.3 million.
This moderation in employment figures is important for Forex traders, as the health of the UK labour market directly affects the British Pound (GBP) and currency pairs like GBP/USD, EUR/GBP, and GBP/JPY. Slower employment growth may signal weaker consumer spending, lower economic momentum, and reduced inflation pressures, all of which can influence Bank of England (BoE) policy decisions.
Unemployment and Economic Inactivity Trends
Despite the decline in payrolled employees, the UK employment rate for individuals aged 16 to 64 remains relatively high at 75.0%, although slightly down from the previous quarter. Conversely, the unemployment rate rose to 5.0%, marking an increase both quarterly and year-on-year.
The economic inactivity rate, measuring those not in the labour force, remained broadly unchanged at 21.0%, still below last year’s levels. Additionally, the Claimant Count—a measure of those claiming unemployment benefits—stood at 1.696 million in October 2025, slightly up month-on-month but lower than last year.
These labour market trends matter for Forex because slower employment growth and rising unemployment may pressure the GBP against the USD and other major currencies. Traders may react by adjusting positions in EUR/GBP and GBP/JPY, particularly around BoE policy announcements or economic data releases.
Wage Growth Shows Mixed Signals
Annual growth in average earnings for regular pay rose 4.6%, and total earnings (including bonuses) grew 4.8%. Private sector pay increased 4.2%, while public sector pay jumped 6.6%—partly due to earlier-than-usual pay rises in 2025.
When adjusted for inflation using CPIH, real regular pay growth was 0.5%, and total pay growth was 0.7%. Using CPI, the real growth rates were slightly higher at 0.8% and 1.0%, respectively.
For Forex traders, moderate wage growth combined with slowing employment can signal muted inflation pressures, which may influence BoE expectations and, in turn, affect the GBP in major currency pairs like GBP/USD and EUR/GBP.
Labour Market Data Sources and Volatility
The UK uses multiple sources for labour market data:
Labour Force Survey (LFS): household survey covering employment, unemployment, and self-employment.
Workforce Jobs (WFJ): business survey primarily measuring employee jobs.
Pay As You Earn (PAYE) Real Time Information (RTI): administrative tax data on payrolled employees.
While RTI data indicate a consistent decline in employees over the past year, LFS estimates show slight quarterly increases. These differences are due to methodology and improvements in survey sampling and response rates. Traders should interpret the labour market data cautiously and monitor which dataset influences market reactions most strongly.
Implications for Forex Traders
Slowing UK employment, modest wage growth, and rising unemployment create a complex backdrop for Forex trading. Key takeaways for traders include:
GBP/USD Sensitivity: Weak employment and moderate wages may pressure the GBP, while positive surprises could boost it.
EUR/GBP Volatility: Slower UK growth relative to the Eurozone may strengthen the EUR versus the GBP.
GBP/JPY Safe-Haven Flows: Political or economic uncertainty can amplify movements against the Yen.
By tracking these indicators alongside BoE monetary policy signals, traders can develop strategies for Forex trading for beginners and advanced traders alike.
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