Labour market update for London – October 2019

London and UK labour markets remain stable

 The ONS today released labour market data for the three months to August 2019. London’s labour market was largely stable with a fall in the recorded employment rate on the previous quarter while the unemployment rate increased slightly. The UK employment rate was higher than a year earlier but slightly lower than last quarter. Meanwhile, a tight labour market continued to feed into wage growth at the national level.

  • In the three months to August 2019 there were 4.6 million Londoners in work, down by 30,000 on the previous year. At the same time, there were 225,000 unemployed residents and just over 1.3 million economically inactive working age residents.
  • London’s 16-64 employment rate was 74.2%, down 0.7 percentage points on the quarter and on the year. For the UK as a whole the employment rate stood at 75.9%, up by 0.3 percentage points on the year.
  • London’s unemployment rate (the number of unemployed people as a percentage of the labour force) was6%, which was virtually unchanged on the previous year. The UK unemployment rate was 3.9%, down 0.2 percentage points on the year.
  • Data for Great Britain shows that estimated average annual growth in weekly earnings for employees was 3.8% for both total pay (including bonuses) and regular pay. After adjusting for inflation, total pay has grown by 1.9% and regular pay by 2%. Despite recent growth, earnings in real terms remain lower than before the 2008/09 recession.
  • MHCLG recently published the Indices of Deprivation 2019, the Government’s primary measure of relative deprivation for small areas (LSOAs) in England.
    • The main index, the Index of Multiple Deprivation (IMD), combines measures across seven distinct domains of deprivation. It shows that several boroughs – in particular, Tower Hamlets and Westminster – have seen large decreases in the proportion of neighbourhoods that are highly deprived (10% most deprived nationally) compared to the IMD 2015.
    • London does relatively well on the ‘Employment’ and ‘Education, Skills & Training’ deprivation domains:
      • Looking at the ‘Employment’ deprivation domain, only 2% of London’s LSOA are among the 10% most deprived nationally – a small improvement since 2015 (down from 3%).
      • The capital had no highly deprived LSOAs for the ‘Education, Skills & Training’ deprivation domain with more than two-thirds of its LSOAs having below average deprivation on this measure.
    • The GLA’s City Intelligence Unit has done some initial analysison the Indices of Deprivation 2019 and will produce further analysis over the coming weeks.
  • Please see the charts and tables on the following pages for more detail on headline labour market data.


Note on interpreting labour market data: many of the statistics presented here (for example, the employment rate and unemployment rate) are estimates based on a survey, and as such have a margin of error- known as sampling variability. For example, a sampling variability of 0.1 and an estimated value of 2% would mean that if the survey was carried out 100 times, then in 95 of these the value would be between 1.9% and 2.1%. Changes in the headline indicators for London, and the gap between London and the UK are typically within the survey’s margin of error, meaning they are not statistically significant and may not reflect real changes / differences.


Headline labour market data – employment rate, unemployment rate, and economic inactivity rate

Note: charts show seasonally adjusted data.

London’s employment rate (i.e. the proportion of London’s residents aged 16-64 population in employment) in the three months to August 2019 was 74.2%, down 0.7 percentage points on the quarter and on the year. The UK’s employment rate was 1.7 percentage points higher than London’s at 75.9%, down 0.2 percentage points on the quarter and up 0.3 percentage points on the year.

In the three months to August 2019 London’s ILO unemployment rate was 4.6%, up 0.4 percentage points on the quarter and unchanged on the previous year. The UK’s unemployment rate stood at 3.9%, same as the previous quarter and down 0.2 percentage points on the year.

In the three months to August 2019 the rate of economic inactivity in London (the proportion of 16 to 64 year olds not in work and not looking for or not able to work) was 22.2%, up 0.6 percentage points on the quarter and up 0.8 percentage points on the year. The UK’s rate of economic inactivity stood at 21%, unchanged on the quarter and down 0.2 percentage points on the year.

Headline labour market data for London and the UK

*All figures are seasonally adjusted. Rates are based on working age (16 – 64 male and female), with the exception of the unemployment rate which is age 16+. We are no longer including a table with the claimant count (the number of people claiming unemployment benefits). The roll out of Universal Credit has caused problems with this statistic. In September 2017 we provided a briefing.  

Jobs charts

Year-on-year jobs growth (%), London and the UK, 1997 to 2019 Q2

Source: ONS workforce jobs

Jobs growth in London by sector, last 12 months (2018-19 Q2) and previous (2017-18 Q2)

Source: ONS workforce jobs