• Summary of key points
  • Measuring the labour market
  • Payrolled employees
  • Employee pay and inflation
  • Additional payrolled employee statistics
  • Employment rate
  • Unemployment rate
  • Economic inactivity rate
  • Claimant count
  • Summary of headline indicators



Having improved significantly since the depths of the pandemic, the latest labour market statistics again indicate a slowdown in London’s recovery.

The employment rate was down slightly on the previous quarter and the growth in payrolled employees has moderated in recent months.

In addition, inactivity is up on both the quarter and the year, while both the unemployment and the claimant count rates have recently levelled off.

Although nominal pay growth remains relatively healthy, many employees are still likely to see a decrease in pay in real terms as a result of high inflation.


Summary of key points


  • The most timely estimate of payrolled employees shows an increase of around 7,120, or 0.2%, in London between May and June 2022 and was 1.1% above pre-pandemic (February 2020) levels.

  • The employment rate in London was estimated at 75.4% for the three months ending May 2022, down 0.3 percentage points (pp) on the previous quarter and up 0.8pp on the same period in the previous year. London’s employment rate was lower than the UK average (75.9%).

  • The unemployment rate was unchanged but still higher than the UK average. London’s unemployment rate was estimated at 4.6%, unchanged on the quarter and down 1.9pp from a year earlier. The UK average was 3.8%.

  • London’s inactivity rate (the measure of those not looking and/or not available to work) was estimated at 20.7%. This was up 0.6pp on the previous year and up 0.3pp on the previous quarter but remained lower than the UK-wide estimate of 21.1%.

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Measuring the labour market


The ONS has published its latest labour market update covering Labour Force Survey (LFS) data for the three months ending May 2022 and real-time information (RTI) data up to June 2022. This bulletin presents the latest headline labour market estimates for London.

Please note:

  • Many of the statistics presented here are estimates based on surveys, and as such have a margin of error – known as sampling variability.

  • They also cover different reference periods or count dates, and have therefore been impacted differently by the spread of COVID-19.

More information and previous GLA Economics analyses can be found on our labour market analysis page.

More information on the data used and a glossary of terms can be found on the ONS website.

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Payrolled employees


The count of payrolled employees from HMRC’s Pay As You Earn (PAYE) RTI dataset offers a timely measure of labour market trends:

  • Early estimates indicate that there were around 4.2 million payrolled employees living in London in June 2022, an increase of around 7,120, or 0.2%, on the previous month.

  • The latest London estimate represents an increase of 190,000, or 4.7%, on the previous year (June 2021) against a UK average increase of 3.0% (see charts).

  • Relative to pre-pandemic (February 2020) levels, the number of payrolled employees in London was up by 44,700, or 1.1%. This compares to an increase of 1.9% across the UK on average.

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Jan 2016Jan 2017Jan 2018Jan 2019Jan 2020Jan 2021Jan 2022-4%0%4%8%
LondonUnited KingdomPayrolled employees, change on previous year​Latest data for June 2022​

Source: HM Revenue and Customs – Pay As You Earn Real Time Information.

Note: Estimates are based on where employees live. March 2020 indicated by dotted line.


2.1 % 2.3 % 1.1 % 0.9 % 0.4 %-0.3 % 1.9 %OuterLondon -West andNorth WestOuterLondon -SouthOuterLondon -East andNorth EastInnerLondon -EastInnerLondon -WestLondonUK0%1%2%
Payrolled employees, change since February 2020 by NUTS2 region​Latest data for June 2022​

Source: HM Revenue and Customs – Pay As You Earn Real Time Information.

Note: Estimates are based on where employees live.


6.1%5.9%4.7%3.6%3.2%4.5%3.0%OuterLondon -SouthOuterLondon -East andNorth EastOuterLondon -West andNorth WestInnerLondon -WestInnerLondon -EastLondonUK0%2%4%6%8%
Payrolled employees, change on previous year by NUTS2 region​Latest data for June 2022​

Source: HM Revenue and Customs – Pay As You Earn Real Time Information.

Note: Estimates are based on where employees live.


Employee pay and inflation


The RTI dataset also provides information on the nominal monthly pay of payrolled employees living in London. This can be adjusted for inflation to estimate real pay over time.

CPIH (consumer price inflation including owner-occupiers’ housing costs) is a national measure and does not account for region-specific price changes.



The median pay is an average which measures the middle point in the range of recorded monthly employee salaries.

In June 2022:

  • Median monthly pay in London was £2,560, an increase of 13.9% since February 2020 and an increase of 5.6% on the year.

  • In the UK overall, median pay was £2,110, up by 13.4% since February 2020 and up 6.6% on the year.

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Jan 2015Jan 2016Jan 2017Jan 2018Jan 2019Jan 2020Jan 2021Jan 2022£1,600£1,800£2,000£2,200£2,400£2,600
London, nominalUK, nominalMedian monthly employee pay​Nominal pay to June 2022 not adjusted for inflation​

Source: HM Revenue and Customs – Pay As You Earn Real Time Information.

Note: Estimates are based on where employees live. March 2020 indicated by dotted line.



Growth in real wages can be estimated by subtracting the rate of inflation, here the CPIH, from the growth in nominal pay.

In May 2022, the latest month for which CPIH inflation data is available:

  • The year-on-year CPIH rate in the UK was 7.9%.

  • Nominal employee pay was up by 6.3% on the year in London, resulting in a decrease of 1.5% in real pay on the year.

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Jan 2020Jan 2021Jan 2022-10%-5%0%5%10%15%
Nominal payCPIHReal payDecomposition of real median pay in London, % annual change​Effect from nominal pay change and CPIH inflation, to May 2022​

Source: HM Revenue and Customs – Pay As You Earn Real Time Information, ONS.

Note: March 2020 indicated by dotted line. Inflation measure does not account for region-specific price changes. Sign of inflation rates has been reversed (higher inflation rates are associated with lower real pay growth).


Additional payrolled employee statistics


The tabs below are each updated once per quarter, as new data is released by the ONS/HMRC.



Recent changes in the number of payrolled employees vary by age group. Comparing June 2022 to pre-pandemic (February 2020) levels:

  • The number of payrolled employees “Aged: 50-64” in London was up by 3.9%, while the number of employees “Aged: 25-34” was down by 1.2%.

  • For the UK overall, the number of payrolled employees in those two age groups saw an increase of 3.4% and an increase of 0.6%, respectively.

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Aged: 18-24Aged: 25-34Aged: 35-49Aged: 50-64Aged: 65+-2%0%2%5%8%
LondonUnited KingdomPayrolled employees, change since February 2020 by age group​Latest data for June 2022​

Source: HM Revenue and Customs – Pay As You Earn Real Time Information.

Note: Estimates are based on where employees live.



There is considerable variation in the change in payrolled employees by London authority. Comparing May 2022 to pre-pandemic (February 2020) levels:

  • The number of payrolled employees living in Tower Hamlets was up by 7.0%, while the number living in Haringey was down by 3.4%.

  • Overall, the number of payrolled employees were still below pre-pandemic levels in 9 out of 33 London authorities (including City of London, see map).

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+−
Change since
February 2020 (%)
-8% to -6%
-6% to -4%
-4% to -2%
-2% to 0%
0% to 2%
2% to 4%
4% to 6%
6% to 8%
Leaflet

Source: HM Revenue and Customs – Pay As You Earn Real Time Information. Contains Ordnance Survey data Crown copyright and database rights [2015].

Note: Estimates are based on where employees live.



Some industries have yet to recover from the pandemic. Comparing April 2022 to pre-pandemic (February 2020) levels:

  • Public admin & defence saw the highest percentage growth in payrolled employees at 15.7%, followed by Health (7.7%) and Administration (4.1%).

  • On the other hand, Hospitality saw the lowest percentage growth with a decrease of 7.2%, followed by Transport & storage (down by 5.8%) and Arts & recreation (down by 5.3%).

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-10%0%10%HospitalityTransport & storageArts & recreationOther servicesRetailManufacturingReal estateConstructionFinance & insuranceEducationInformation & communicationProfessional servicesAdministrationHealthPublic admin & defence
LondonUnited KingdomPayrolled employees, change since February 2020 by selected sector​Latest data for April 2022​

Source: HM Revenue and Customs – Pay As You Earn Real Time Information.

Note: Estimates are based on where employees live. Excludes sectors with fewer than 25,000 payrolled employees in London.


Employment rate


Employment measures the number of people aged 16 and over in paid work and those who had a job that they were temporarily away from. The employment rate is the proportion of people aged between 16 and 64 years who are in employment.

For March to May 2022:

  • The 16-64 employment rate in London was estimated at 75.4%; this represents a decrease of 0.3 percentage points (pp) on the previous quarter and an increase of 0.8pp from a year earlier.

  • The overall UK employment rate was estimated at 75.9%, an increase of 0.4pp on the quarter and an increase of 1.1pp on the year.

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Jan 2015Jan 2016Jan 2017Jan 2018Jan 2019Jan 2020Jan 2021Jan 202270%72%75%78%80%
LondonUnited KingdomEmployment rate (% of working age population)​Latest data for three-month period ending May 2022​

Source: ONS Labour Force Survey.

Note: The margin of error is +/- 1.4% for London and +/- 0.4% for the UK. March 2020 indicated by dotted line.


Unemployment rate


Unemployment measures people without a job who have been actively seeking work within the last four weeks and are available to start work within the next two weeks. The unemployment rate is the proportion of the economically active population who are unemployed.

For March to May 2022:

  • The unemployment rate for London was estimated at 4.6%; this represents no change on the previous quarter and a decrease of 1.9pp from a year earlier.

  • The UK unemployment rate was estimated at 3.8%, a decrease of 0.1pp from the previous quarter and a decrease of 1.1pp on the year.

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Jan 2015Jan 2016Jan 2017Jan 2018Jan 2019Jan 2020Jan 2021Jan 20220%2%4%6%8%
LondonUnited KingdomUnemployment rate (% of economically active)​Latest data for three-month period ending May 2022​

Source: ONS Labour Force Survey.

Note: The margin of error is +/- 0.8% for London and +/- 0.2% for the UK. March 2020 indicated by dotted line.


Economic inactivity rate


The economic inactivity rate is the proportion of 16 to 64 year olds not in work and either not looking for or unable to work. This group includes some students, people who are looking after family/home, and people who are too ill to work (most of whom are long-term sick).

For March to May 2022:

  • The rate of economic inactivity in London was estimated at 20.7%; this represents an increase of 0.3pp on the previous quarter and an increase of 0.6pp from a year earlier.

  • The UK rate of economic inactivity was 21.1%; this represents a decrease of 0.4pp on the previous quarter and a decrease of 0.3pp on the year.

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Jan 2015Jan 2016Jan 2017Jan 2018Jan 2019Jan 2020Jan 2021Jan 202215%18%20%22%25%
LondonUnited KingdomEconomic inactivity (% of working age population)​Latest data for three-month period ending May 2022​

Source: ONS Labour Force Survey.

Note: The margin of error is not published for London, the UK margin is +/- 0.4%. March 2020 indicated by dotted line.


Claimant count


The claimant count is a measure of the number of people claiming benefits principally for the reason of being unemployed. It includes people claiming Jobseeker’s Allowance and those claiming Universal Credit who are required to seek work.

The latest data for June 2022 show that:

  • There were 295,000 people claiming unemployment-related benefits in London - equal to a claimant unemployment rate (as a proportion of residents aged 16 to 64) of 4.9%.

  • The number of claimants in London has decreased by 145,000, or 33.0%, on the year, compared to a decrease of 723,000, or 31.6%, in the UK overall.

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Jan 2015Jan 2016Jan 2017Jan 2018Jan 2019Jan 2020Jan 2021Jan 20220%2%5%8%10%
LondonUnited KingdomClaimant count (as a % of residents aged 16 to 64)​Latest data for period June 2022​

Source: ONS Claimant Count by sex and age (NSA).

Note: may include some employed claimants on low hours or earnings. March 2020 indicated by dotted line.


Allcategories:Age 16+Aged16-24Aged25-29Aged30-34Aged35-39Aged40-44Aged45-49Aged50-54Aged55-59Aged60-64-60%-40%-20%0%
LondonUnited KingdomYear-on-year percentage change in claimant count​Latest data for period June 2022​

Source: ONS Claimant Count by sex and age (NSA).

Note: may include some employed claimants on low hours or earnings.


Summary of headline indicators


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