Summary of key points


  • The total number of payrolled employees rose by around 22,600 in London, or 0.5%, between December and January 2022 and is 0.4% above pre-pandemic (February 2020) levels.
  • Employee growth varies by sector. Despite recent increases, payrolled employee numbers in sectors such as Hospitality (-10.1%) and Arts & recreation (-5.1%) remain lower than February 2020 levels.
  • The employment rate in London was estimated at 75.9% for the three months ending December 2021, up 0.8 percentage points (pp) on the previous quarter and up 1.5pp on the same period in the previous year. London’s employment rate is now slightly higher than the UK average (75.5%).
  • The unemployment rate continued to fall from its pandemic peak but is still higher than the UK average. London’s unemployment rate was estimated at 5.2%, down 0.5pp on the quarter and down 2.1pp from a year earlier. The UK average was 4.1%.
  • London’s inactivity rate (the measure of those not looking and/or not available to work) was estimated at 19.8%. While this was up 0.2pp on the previous year, the inactivity rate fell 0.6pp on the previous quarter and remains lower than the UK-wide estimate of 21.2%.

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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 December 2021. 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 COVID-19 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 January 2022, an increase of around 22,600 or 0.5% on the previous month.

  • The latest London estimate represents an increase of 252,000 or 6.4% on the previous year (January 2021) against a UK average increase of 4.8% (see charts).

  • Relative to pre-pandemic levels (February 2020), the number of payrolled employees in London was up by 16,100 or 0.4%. This compares to an increase of 1.5% across the UK on average.

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Change on previous year

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

Note: Estimates are based on where employees live.


Change since February 2020, NUTS2 regions

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

Note: Estimates are based on where employees live.


Change on previous year, NUTS2 regions

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

Note: Estimates are based on where employees live.


Additional payrolled employee statistics


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


Change by industry


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

  • Public admin & defence saw the highest percentage growth in payrolled employees at 9.8%, followed by Administration (6.5%) and Health (6.0%).

  • On the other hand, Hospitality saw the lowest percentage growth with a decrease of 10.1%, followed by Other services (down by 5.3%) and Arts & recreation (down by 5.1%).

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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.


Change by age group


Recent changes in the number of payrolled employees vary by age group. Comparing December 2021 to pre-pandemic levels (February 2020):

  • The number of payrolled employees “Aged: 65+” in London was up by 4.8%, while the number of employees “Aged: 25-34” was down by 2.3%.

  • In the United Kingdom overall, those two age groups saw an increase of 4.8% and an increase of 0.0%, respectively.

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

Note: Estimates are based on where employees live.


Change by local authority


There is considerable variation in the change in payrolled employees by London authority. Comparing November 2021 to pre-pandemic levels (February 2020):

  • The number of payrolled employees living in Tower Hamlets was up by 3.8%, while the number living in City of London was down by 7.7%.

  • Overall, the number of payrolled employees were still below pre-pandemic levels in 16 out of 33 London authorities (including City of London, see map).

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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.


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 October to December 2021:

  • The 16-64 employment rate in London was estimated at 75.9%; this represents an increase of 0.8 percentage points (pp) on the previous quarter and an increase of 1.5pp from a year earlier.

  • The overall UK employment rate was estimated at 75.5%, an increase of 0.1pp on the quarter and an increase of 0.9pp on the year.

The overall number of Londoners in employment is still 49,000 or 1.0% below where it was before the pandemic (December 2020 to February 2021). This is likely down to a drop in self-employment (see here).

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Source: ONS Labour Force Survey.

Note: The margin of error is +/- 1.4% for London and +/- 0.4% for the UK.


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 October to December 2021:

  • The unemployment rate for London was estimated at 5.2%; this represents a decrease of 0.5pp on the previous quarter and a decrease of 2.1pp from a year earlier.

  • The UK unemployment rate was estimated at 4.1%, a decrease of 0.2pp from the previous quarter and a decrease of 1.2pp on the year.

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Source: ONS Labour Force Survey.

Note: The margin of error is +/- 0.8% for London and +/- 0.2% for the UK.


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 October to December 2021:

  • The rate of economic inactivity in London was estimated at 19.8%; this represents a decrease of 0.6pp on the previous quarter and an increase of 0.2pp from a year earlier.

  • The UK rate of economic inactivity was 21.2%. This represents an increase of 0.1pp on the previous quarter and an increase of 0.1pp on the year.

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Source: ONS Labour Force Survey.

Note: The margin of error is not published for London, the UK margin is +/- 0.4%.


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 January 2022 show that:

  • There were 339,000 people claiming unemployment related benefits in London - equal to a claimant unemployment rate (as a proportion of residents aged 16 to 64) of 5.6%.

  • The number of claimants in London has decreased by 143,000, or 29.6%, on the year, compared to a decrease of 746,000, or 29.2%, in the UK overall.

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Rate of residents aged 16-64

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

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


Year-on-year percentage change

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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