Pay growth continues to rise against the odds but 2025 stands to be a difficult year for employers and jobseekers, says the CIPD

Responding to today’s ONS labour market figures, James Cockett, senior labour market economist for the CIPD, the professional body for HR and people development, comments:

“Today’s figures show that pay growth has risen for the third consecutive month, defying expectations. The overall labour market remains resilient, with unemployment holding steady. However, vacancies are continuing to fall. Combining this with employers’ perceptions that they may be forced put the brakes on hiring means it stands to be a tough jobs market for candidates in 2025.

“It remains to be seen how long such robust pay growth will continue for over the next few months as employers question what they can afford after planned increases to National Insurance contributions and to the National Living Wage come into force in April.

“What is certain is that these pending increases in employment costs will add to the growth challenges facing businesses. Consequently, it is important that consultation with employers on the new Growth and Skills levy is fast-tracked, together with other changes to skills policy, that can support firms to upskill their workforces and address technical skills and gaps shortages holding back business and the economy.”