The number of payrolled employee jobs held by London residents drifted lower throughout the second half of 2024, falling below the level a year earlier. Meanwhile, the unemployment rate rose again, to 6.2%, the highest it has been – except during the pandemic – since January 2016. But median pay for employees rose faster than inflation over 2024, although growth was slower than in most other regions/countries of the UK.

Taken together, this suggests that the slowdown of the London labour market identified in recent months continues, while the wider UK is now following London and also showing more weakness according to payrolled employee and unemployment numbers.

This month’s release is also characterised by extreme short-term movements in estimates using ONS Labour Force Survey data, especially the employment rate. This makes it difficult to draw firm conclusions. Indicators in this release should not be looked at in isolation, and quarterly changes should be treated cautiously.


The Office for National Statistics revised its main labour market survey data in December 2024 based on revised population estimates for April to June 2024.

These new revisions bring the estimated number of people in employment using the Labour Force Survey closer to other data sources — such as HMRC administrative data and business survey data. While ONS has revised the national time series all the way back to 2011, data for the regions has only been revised back to the start of 2019, creating discontinuities in the London series.

Our December analysis provides more details about this revision and the comparability of data sources over time.

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Summary of key points


  • The most timely estimate of payrolled employees (subject to revision) shows a decrease of around 6,860, or 0.2%, in London between November and December 2024 and a decrease of 0.3% on the year.

  • The employment rate in London was estimated at 74.7% for the three months ending November 2024, an increase of 0.7pp on the same period in the previous year, but down on the previous quarter. The sharpness of this quarterly decrease needs to be interpreted very cautiously, as ONS warns of volatility in the estimates due to smaller sample sizes in the Labour Force Survey. London’s employment rate was estimated to be roughly in line with the UK average (74.8%).

  • London’s unemployment rate was estimated at 6.2%, up on the quarter and an increase of 1.7pp from a year earlier. The UK average was 4.4%.

  • London’s inactivity rate (the measure of those not looking and/or not available to work) was estimated at 20.3%. This was a decrease of 2.2pp on the previous year, but was also slightly up on the quarter. It is lower than the UK-wide estimate of 21.6%.


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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 4.4 million payrolled employees living in London in December 2024, a decrease of around 6,860 (0.2%) compared to November.

  • The latest London estimate represents a decrease of 13,800 (0.3%) on the previous year (December 2023), compared to no change UK-wide.

  • Across countries/regions of the UK, only Scotland has had a greater percentage fall in resident payrolled employment than London on the year.

  • Within London, the fall is most pronounced in Inner London boroughs.

  • Relative to pre-pandemic (February 2020) levels, the number of payrolled employees in London was up by 228,000, or 5.5%. This compares to an increase of 4.5% across the UK.

The figures for December 2024 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, within London

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

Note: Estimates are based on where employees live.

Change on previous year, UK 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 2024:

  • Median monthly pay in London was £2,910, an increase of 4.9% on the year.

  • In the UK overall, median pay was £2,460, up by 5.6% 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 2023 to December 2024:

  • Scotland was the region/country with the lowest growth in median monthly salary at 4.8%.

  • The region/country with the highest growth in median monthly salary was Northern Ireland at 6.5%.

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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, giving a better idea of how much wages progress in relation to the cost of living.

In December 2024, the latest month for which CPIH inflation data is available:

  • The year-on-year CPIH rate in the UK was 3.5%.

  • Nominal employee pay was up by 4.9% on the year in London, resulting in an increase of 1.4% in real pay on the year (rounding explains why the figures mentioned here may not exactly add-up).

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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 backward-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 October 2024 to December 2024, we estimate the annualised growth rate of real pay in London to be 2.2%.

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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 2024 to levels the previous year:

  • The number of employees “Aged: 18-24” was down by 3.7%. This fall is much larger than the UK’s.

  • The number of employees aged 25-49 did not change in London. The only working-age (16-64) group which saw a rise in the capital was 50-64.

  • In London and the UK, we see a rise in the number of payrolled employee jobs held by people aged 65+, though they still represent only a small share of the total.

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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 2024 with levels the year before:

  • The number of payrolled employees living in Barking and Dagenham, the borough (incl. the City) with the highest growth, was up by 2.2% on the year.

  • The borough with the lowest growth (excl. the City), Westminster, recorded a decrease of 2.9%.

  • The boroughs gaining resident payrolled employment tend to be Outer London boroughs in the East and West. Inner London boroughs have, on the other hand, been losing resident payrolled employment.

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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 2024 to the same time last year:

  • Health saw the highest percentage growth in payrolled employees at 4.6%, followed by Public admin & defence (3.6%) and Arts & recreation (3.0%).

  • Information & communication saw its number of payrolled employee jobs fall, with a decrease of 3.5%, followed by Hospitality (down by 3.2%) and Construction (down by 2.7%).

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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.

Note: because of the volatility and uncertainty in Labour Force Survey estimates highlighted by ONS, we do not report on quarterly changes in employment, unemployment and inactivity rates, only the direction.

For September to November 2024:

  • The 16-64 employment rate in London was estimated at 74.7%; this represents an increase of 0.7pp from a year earlier, but a fall on the quarter.

  • The overall UK employment rate was estimated at 74.8%, broadly stable on the year and the quarter.

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London and UK rates

Source: ONS Labour Force Survey.

Note: The margin of error is ±1.6% for London and ±0.5% for the UK. The LFS has been reweigted from July to September 2022 onwards. September 2022 indicated by dotted line.


Regional comparison

Source: ONS Labour Force Survey.

Note: The margin of error ranges from ±1.5% to ± 2.9% across regions.


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.

Note: because of the volatility and uncertainty in Labour Force Survey estimates highlighted by ONS, we do not report on quarterly changes in employment, unemployment and inactivity rates, only the direction.

For September to November 2024:

  • The unemployment rate for London was estimated at 6.2%. This represents an increase of 1.7pp from a year earlier, and is also up on the quarter.

  • The UK unemployment rate was estimated at 4.4%, an increase of 0.5pp on the year, and a rise on the quarter.

  • The unemployment rate in London was the highest across all regions/countries of the UK.

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London and UK rates

Source: ONS Labour Force Survey.

Note: The margin of error is ±1.0% for London and ±0.3% for the UK. The LFS has been reweigted from July to September 2022 onwards. September 2022 indicated by dotted line.


Regional comparison

Source: ONS Labour Force Survey.

Note: The margin of error ranges from ±0.7% to ±1.7% across regions.


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. The main categories in this group are students, people who are looking after family/home full-time, and people who cannot work for health reasons (most of whom are long-term sick).

Note: because of the volatility and uncertainty in Labour Force Survey estimates highlighted by ONS, we do not report on quarterly changes in employment, unemployment and inactivity rates, only the direction.

For September to November 2024:

  • The rate of economic inactivity in London was estimated at 20.3%. This represents a decrease of 2.2pp from a year earlier, but was up on the quarter.

  • The UK rate of economic inactivity was 21.6%. This represents a decrease of 0.4pp on the year, and a fall on the quarter.

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London and UK rates

Source: ONS Labour Force Survey.

Note: The margin of error is not published for London, the UK margin is ±0.3%. The LFS has been reweigted from July to September 2022 onwards. September 2022 indicated by dotted line.


Regional comparison

Source: ONS Labour Force Survey.

Note: The margin of error is not published for regions.


Online job postings


The number of online job postings is an indicator of the demand for labour in London. It is very timely and complements more traditional employment indicators.

We use online job postings data provided by Lightcast. Given the volatility associated with single-month estimates, the three-month average estimates provide a more reliable indication of short-term changes in the demand for labour.

  • Latest job posting estimates suggest there were 74,500 online postings for jobs in London in December 2024, (single-month estimate), a decrease of 20% on the year, and of 17% compared to November 2024.

  • While this is a relatively sharp drop, it is partly indicative of the seasonality of recruitment activity in London, which typically declines in the run-up to the December holiday season before bouncing back in the early months of the new year.

  • Following economic reopening from the COVID-19 pandemic, the three-month average number of online postings climbed rapidly from the low of June 2020 (56,700) to the high of June 2022 (185,800).

  • The number of online job postings then decreased sharply over the summer of 2022 before temporarily evening out around the beginning of 2023. Since then and throughout 2024, the level of recruitment activity declined back towards pre-pandemic levels seen in late 2019.

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Postings for jobs in London

Source: Lightcast.

Note: Data not seasonally adjusted. 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.

Note that Claimant Count numbers are affected by the rollout, starting in May 2024, of a higher administrative earnings threshold for full work-search conditionality. This change is likely to affect around 180,000 claimants in the UK over six months, raising the Claimant Count figure over that time.

The latest data for December 2024 show that:

  • There were 359,000 people claiming unemployment-related benefits in London - equal to a seasonally adjusted claimant rate (as a proportion of residents aged 16 to 64) of 5.9%. This rate was 5% in November 2023. The age groups with the fastest-rising claimant rates are between 45 and 54 years old.

  • Up until the early months of the Covid-19 pandemic, London’s claimant rate was in line with the UK’s. The gap opened then, and has not closed since. The UK’s claimant rate was 4.1% in December 2024.

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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. September 2022 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.


Summary of headline indicators


Headline estimates for Sep 2024-Nov 2024

Number* (thousands)

Rate** (%)

Latest Estimate

Change on Quarter

Change on Year

Latest Estimate

Change on Quarter

Change on Year

Employment

London

4,852

-42

u

126

t

74.7

-1.2

u

0.7

t

England

28,832

32

t

413

t

75.2

-0.3

u

-0.1

u

UK

33,783

36

t

438

t

74.8

-0.1

u

0.0

v

Unemployment

London

323

32

t

100

t

6.2

0.6

t

1.7

t

England

1,362

127

t

169

t

4.5

0.4

t

0.5

t

UK

1,568

133

t

186

t

4.4

0.4

t

0.5

t

Economic Inactivity

London

1,263

41

t

-121

u

20.3

0.6

t

-2.2

u

England

7,719

-12

u

-30

u

21.1

-0.1

u

-0.3

u

UK

9,304

-54

u

-64

u

21.6

-0.2

u

-0.4

u

Source: ONS Labour Force Survey. Quarter on quarter changes must be interpreted very cautiously, especially for London, given the recent volatility of estimates.

Notes: All figures are seasonally adjusted. *Numbers are based on total population (16+, male and female), except for inactivity which is 16-64. **Rates are based on working age population (16–64, male and female), except for the unemployment rate which is age 16+.

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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 November 2024 and real-time information (RTI) data up to December 2024. 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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