The London labour market saw little change in December with the pay squeeze loosening a little and the employee job number remaining roughly constant at its 2023 level. However, unemployment is still a concern with the numbers on both survey and claimant count measures creeping up again.

Real employee pay in London returned to growth with the year-on-year measure (up 0.7% in November) at its strongest since the beginning of 2022 while the more current three-month annualised rate (up 2.9%) continues to improve as it has done for the last few months.

The ONS has again released experimental “adjusted” estimates of the headline labour market statistics because of the uncertainty surrounding the official Labour Force Survey.


Summary of key points


  • The most timely estimate of payrolled employees (subject to revision) shows a decrease of around 2,610, in London between November and December 2023 and an increase of 1.0% on the year.

  • Labour Force Survey (LFS) statistics are currently not considered reliable enough for publication. The ONS has instead released experimental “adjusted” estimates of the employment, unemployment and inactivity rates for the UK and the regions.

  • The adjusted employment rate in London was estimated at 74.2% for the three months ending November 2023. London’s employment rate was estimated to be lower than the UK average (75.8%).

  • The adjusted unemployment rate in London was estimated at 5.3%. The UK average was 4.2%.

  • London’s adjusted inactivity rate (the measure of those not looking and/or not available to work) was estimated at 21.5%. This was higher than the UK-wide estimate of 20.8%.

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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 4.3 million payrolled employees living in London in December 2023, a decrease of around 2,610, or 0.1%, on the previous month.

  • The latest London estimate represents an increase of 41,000, or 1.0%, on the previous year (December 2022) against a UK average increase of 1.0% (see charts).

  • Relative to pre-pandemic (February 2020) levels, the number of payrolled employees in London was up by 185,000, or 4.5%. This compares to an increase of 4.1% across the UK on average.

The figures for December 2023 in the RTI dataset are provided to give an indication of the likely level of employees as well as median pay in the latest period. They are of lower quality and may be subject to significant revision in future releases.

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Number of payrolled employees

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.


Change on previous year, regions

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.


Median monthly pay


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

In December 2023:

  • Median monthly pay in London was £2,770, an increase of 5.2% on the year.

  • In the UK overall, median pay was £2,330, up by 6.6% on the year.

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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.


Pay by region


The change in median nominal salary on the year varies between the regions and countries of the UK.

From December 2022 to December 2023:

  • The region/country with the highest growth in median monthly salary was Scotland at 7.8%.

  • The region/country with the lowest growth in median monthly salary was London at 5.2%.

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

Note: Estimates are based on where employees live.


Annual real pay growth


Growth in real wages can be estimated by adjusting nominal pay for the rate of inflation, here CPIH.

In November 2023, the latest month for which CPIH inflation data is available:

  • The year-on-year CPIH rate in the UK was 4.2%.

  • Nominal employee pay was up by 4.9% on the year in London, resulting in an increase of 0.7% in real pay on the year.

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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). Inflation data is released after pay data and is not available for the most recent month.


Annualised growth rates


Annual growth rates are a backwards-looking measure that indicate the cumulative impact of changes over the previous year. This is an important measure that shows how much wages, or prices have changed in total over the last year.

However, it is also important to understand how fast things are changing at the present time. To do this we show annualised growth rates that measure how fast prices and pay have changed over the last three months.

Using the three-month period September 2023 to November 2023, we estimate the annualised growth rate of real pay in London to be 2.9%.

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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.


Additional payrolled employee statistics


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


Change by age group


Recent changes in the number of payrolled employees vary by age group. Comparing December 2023 to levels the previous year:

  • The number of payrolled employees “Aged: 50-64” in London was up by 0.8%, while the number of employees “Aged: 18-24” was down by 0.8%.

  • For the UK overall, payrolled employee numbers in those two age groups increased by 0.6% and decreased by 0.4%, 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 local authority. Comparing November 2023 with levels the year before:

  • The number of payrolled employees living in Barking and Dagenham, the borough with the highest growth (excl. the City), was up by 4.5% on the year.

  • The borough with the lowest growth, Kensington and Chelsea, recorded a decrease of 3.2%.

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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.


Change by industry


Comparing October 2023 to levels the previous year:

  • Health saw the highest percentage growth in payrolled employees at 6.0%, followed by Arts & recreation (4.6%) and Finance & insurance (3.7%).

  • On the other hand, Information & communication saw the lowest percentage growth with a decrease of 2.8%, followed by Retail (down by 0.9%) and Construction (down by 0.6%).

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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.


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 September 2023 to November 2023:

  • London’s adjusted employment rate was estimated to be 74.2%. This rate was unchanged on the previous three-month period, though the latter was estimated using standard Labour Force Survey data.

  • The employment rate for the UK overall was estimated at 75.8%.

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London and UK rates

Source: ONS Labour Force Survey.

Note: Margins of error are not available. March 2020 indicated by dotted line. Adjusted estimates shown in orange.


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 September 2023 to November 2023:

  • London’s adjusted unemployment rate was estimated at 5.3%. This was up 0.1pp on the previous three-month period.

  • The unemployment rate for the UK was estimated at 4.2%.

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London and UK rates

Source: ONS Labour Force Survey.

Note: Margins of error are not available. March 2020 indicated by dotted line. Adjusted estimates shown in orange.


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 September 2023 to November 2023:

  • The adjusted rate of economic inactivity in London was estimated at 21.5%. This was down 0.2pp on the previous three-month period.

  • The UK economic inactivity rate was estimated at 20.8%.

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London and UK rates

Source: ONS Labour Force Survey.

Note: Margins of error are not available. March 2020 indicated by dotted line. Adjusted estimates shown in orange.


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 December 2023 show that:

  • There were 306,000 people claiming unemployment-related benefits in London - equal to a claimant unemployment rate (as a proportion of residents aged 16 to 64) of 5.1%.

  • The number of claimants in London has increased by 20,900, or 7.3%, on the year, compared to an increase of 31,800, or 2.1%, in the UK overall.

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Rate of residents aged 16-64

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

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


Year-on-year percentage change

Source: ONS Claimant Count by sex and age (not seasonally adjusted).

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


Measuring the labour market


The ONS has published its latest labour market update covering Labour Force Survey (LFS) data for the three months ending November 2023 and real-time information (RTI) data up to December 2023. 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.

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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