Falling survey response rates have led to an unprecedented decision by the ONS to first delay and then to curtail publication of UK and regional labour market indicators.

The data published today (October 24) covering UK-level headline employment statistics shows a labour market continuing to cool. However, the new release depends on experimental adjustments to survey responses. Data on the regions, including London, has not been made available.

Last week, ONS did publish the latest HMRC pay-as-you-earn tallies of UK and regional payrolls.

This showed that the number of payrolled employees resident in London continued to fall moderately month-on-month, while real median pay growth turned negative on an annual basis in September for the first time since May.


Summary of key points


  • The most timely estimate of payrolled employees (subject to revision) shows a decrease of around 5,420, or 0.1%, in London between August and September 2023 and an increase of 1.5% on the year.

  • The claimant count rate in London continued to edge higher and is now at 4.9%.

  • The Labour Market estimate data – for employment, unemployment and inactivity is not available for London this month.

  • The employment rate in the UK was estimated at 75.7% for the three months ending August 2023, down 0.3 percentage points (pp) on the previous quarter, unemployment was estimated at 4.2%, up 0.2pp on the quarter and inactivity was at 20.9%, up 2.1pp on the previous quarter. ONS warn that these estimates should be used with extreme caution.

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Update on labour market publications


One of the main data sources for the London Labour Market Update is the ONS Labour Force Survey (LFS). This has been conducted since 1992.

However, the number of people responding to the survey has dropped from around 130,000 in 2001 (a total response rate of 70%), to 84,000 in 2019 (a total response rate of 39%), and finally to 53,000 individuals in April to June 2023 (total response rate 15%).

ONS warned the falling sample sizes meant estimates of key headline statistics are now no longer considered to be reliable. That led to delay of the publication of UK-wide statistics by a week, also delaying our London Labour Market Update.

This month, the ONS produced new estimates that are partially based on other data sources and are considered “experimental” and to be used with “extreme caution”. There are no estimates at the regional level and we therefore do not have estimates for London. There is also uncertainty about whether regional estimates will be available in the November update.

Response rates for London households have long been lower than in the rest of the UK. Since the pandemic they have collapsed to reach 11.8% in Inner London and 11.6% in Outer London in the April-June period (including imputed cases which are excluded in the above figures).

While we and ONS have been aware of this growing issue, we expected that the introduction of a new Transformed Labour Force Survey (TLFS) would resolve the problem. The TLFS will have a larger sample size and its design should enable ONS to better target hard-to-reach households – however it is not due to be published until early 2024.

More information on the changing methods of LFS can be found here and more information on UK labour market estimates in the ONS Labour market overview here.

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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 September 2023, a decrease of around 5,420, or 0.1%, on the previous month.

  • The latest London estimate represents an increase of 64,200, or 1.5%, on the previous year (September 2022) against a UK average increase of 1.2% (see charts).

  • Relative to pre-pandemic (February 2020) levels, the number of payrolled employees in London was up by 166,000, or 4.0%. This compares to an increase of 3.8% across the UK on average.

The figures for September 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 September 2023:

  • Median monthly pay in London was £2,710, an increase of 4.4% on the year.

  • In the UK overall, median pay was £2,260, up by 5.7% 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 September 2022 to September 2023:

  • The region/country with the highest growth in median monthly salary was Scotland at 8.2%.

  • The region/country with the lowest growth in median monthly salary was London at 4.4%.

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

  • The year-on-year CPIH rate in the UK was 6.3%.

  • Nominal employee pay was up by 4.4% on the year in London, resulting in a decrease of 1.9% 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).


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 September 2023 to levels the previous year:

  • The number of payrolled employees “Aged: 50-64” in London was up by 1.3%, while the number of employees “Aged: 18-24” was up by 0.4%.

  • For the UK overall, payrolled employee numbers in those two age groups increased by 0.8% and increased by 0.1%, 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 August 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 4.7% on the year.

  • The borough with the lowest growth, Kensington and Chelsea, recorded a decrease of 2.6%.

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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 July 2023 to levels the previous year:

  • Health saw the highest percentage growth in payrolled employees at 5.8%, followed by Arts & recreation (5.8%) and Hospitality (5.2%).

  • On the other hand, Construction saw the lowest percentage growth with a decrease of 0.4%, followed by Retail (down by 0.3%) and Information & communication (down by 0.0%).

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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.


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 August 2023 show that:

  • There were 299,000 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 increased by 19,000, or 6.8%, on the year, compared to an increase of 30,100, or 2.0%, 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


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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