Labour market participation rose in London, according to the latest ONS data from the Labour Force Survey, however the size of the swings in employment, unemployment and inactivity rates suggests that data quality issues remain a concern.

The employment rate increased to above the UK average, and the unemployment rate rose to the highest of any UK regions. Overall, these moves pushed down the inactivity rate by an indicative 1.4 percentage points in just a single quarter.

The Claimant Count rate has also been rising in the capital, reaching 6% from 5.3% a month earlier. Part of this rise might, however, be due to administrative changes in work-search conditionality rules.

Pay in London has risen slower than in the rest of the country over the past year. When adjusted for inflation, the data shows little increase over the year.

Note that the latest labour market data for London remains volatile and ONS warns that estimates of changes should be treated with caution. We adopt ONS’ prudent language when reporting quarterly changes of the employment rate, unemployment rate and inactivity rate. The focus should be on the general movements rather than the exact figures. As data collection improvements feed into published results, there is a possibility of further revisions. This report uses several data sources and indicators, which need to be taken together to get a reliable picture of London’s labour market.


Summary of key points


  • The most timely estimate of payrolled employees (subject to revision) shows an increase of around 2,820 (+0.1%) in London between June and July 2024, and an increase of 0.5% on the year.

  • The employment rate in London was estimated at 75.1% for the three months ending June 2024, an increase of 1.6pp on the same period in the previous year, and also up on the quarter. London’s employment rate was higher than the UK average (74.5%).

  • London’s unemployment rate was estimated at 5.3%, up on the quarter and a small increase of 0.1pp from a year earlier. The UK average was 4.2%.

  • London’s inactivity rate (the measure of those not looking and/or not available to work) was estimated at 20.7%. This was a decrease of 1.8pp on the previous year, and was also down on the quarter. It is much lower than the UK-wide estimate of 22.2%.

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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 July 2024, an increase of around 2,820 (+0.1%) compared to June 2024.

  • The latest London estimate represents an increase of 20,100 (0.5%), on the previous year (July 2023) compared to a UK-wide increase of 0.8%.

  • London’s rise in payrolled employee jobs over the year is the weakest of all UK regions. The highest increases were found in the East Midlands (+1.1%) and in Northern Ireland (+2.3%).

  • Over the year, the rise in resident payrolled employee jobs in London has been driven by increases in Outer London: +1.2% in East and North East Outer London, +1% in South Outer London, +0.7% in West and North West Outer London. By contrast, resident payrolled employee jobs are stable on the year in East Inner London, and fell by 0.9% in West Inner London.

  • Relative to pre-pandemic (February 2020) levels, the number of payrolled employees in London was up by 235,000, or 5.7%. This compares to an increase of 4.9% across the UK on average.

The figures for July 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 July 2024:

  • Median monthly pay in London was £2,840, an increase of 4.5% on the year.

  • In the UK overall, median pay was £2,400, 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 July 2023 to July 2024:

  • London was the region/country with the lowest growth in median monthly salary at 4.5%.

  • The region/country with the highest growth in median monthly salary was Northern Ireland at 7.9%.

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

  • The year-on-year CPIH rate in the UK was 2.8%.

  • Nominal employee pay was up by 3.3% on the year in London, resulting in an increase of 0.5% in real pay on the year.

  • This modest real pay increase on the year contrasts with rising real pay observed in London between October 2023 and May 2024.

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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 April 2024 to June 2024, we estimate the annualised growth rate of real pay in London to be -0.2%.

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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 industry


Comparing July 2024 to levels the previous year:

  • Public admin & defence saw the highest percentage growth in payrolled employees at 6.1%, followed by Health (4.9%) and Education (4.1%).

  • Information & communication saw its number of payrolled employee jobs fall, with a decrease of 4.6%, followed by Hospitality (down by 2.7%) and Construction (down by 2.3%).

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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 June 2024 to levels the previous year:

  • The number of employees “Aged: 18-24” was down by 2.7%. Otherwise, the number of payrolled employees rose across all the other age groups.

  • The 65+ age group experienced by far the biggest increase, but it only represents 3% of total payrolled employee jobs in London. The small headcount in that category means that it is more likely to exhibit bigger percentage variations than the other groups for a given headcount change.

  • For each age group, the direction of change is the same in London and the UK, although there can be differences between London and the UK in the magnitude of these changes.

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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 May 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 3.2% on the year. The number of payrolled employees increased by 2.1% in Harrow, the second biggest rise.

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

  • The map provides a visual representation of the broad increase in payrolled employee jobs in many Outer London boroughs, and a decline in Inner London, north London and south-west London.

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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.

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 April to June 2024:

  • The 16-64 employment rate in London was estimated at 75.1%; this represents an increase of 1.6pp from a year earlier, and a rise on the quarter.

  • The overall UK employment rate was estimated at 74.5%, a decrease of 0.7pp on the year, and is roughly stable on the quarter.

  • The employment rate in London compares to a high of 78.6% in the South-West, and a low of 68.9% in Wales.

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London and UK rates

Source: ONS Labour Force Survey.

Note: The margin of error is ±1.8% for London and ±0.6% 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 ± 3% 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 April to June 2024:

  • The unemployment rate for London was estimated at 5.3%. This represents an increase of 0.1pp from a year earlier, and is also up on the quarter.

  • The UK unemployment rate was estimated at 4.2%, almost stable on the year (-0.1pp), and down on the quarter.

  • London’s unemployment rate was the highest in the country, just above the East Midlands (5.2%). It compares to 3.4% on the East of England, and 1.9% in Northern Ireland.

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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 ±1.6% 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 April to June 2024:

  • The rate of economic inactivity in London was estimated at 20.7%. This represents a decrease of 1.8pp from a year earlier, and is also down on the quarter.

  • The UK rate of economic inactivity was 22.2%. This represents an increase of 0.7pp on the year, and is stable on the quarter.

  • London’s inactivity rates was the fourth-lowest of the 12 regions and countries of the UK. The highest rate is in Wales (28.3%) and the lowest in the South West (18.5%).

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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 96,280 online postings for jobs in London in July 2024 (single-month estimate), a decrease of 28% on the 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 (56,800) to the high of June 2022 (182,600).

  • 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 into the first half of 2024, the level of recruitment activity has been steadily declining 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, 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 July 2024 show that:

  • There were 363,000 people claiming unemployment-related benefits in London - equal to a seasonally adjusted claimant rate (as a proportion of residents aged 16 to 64) of 6.0%. This rate is up from 4.8% in July 2023.

  • 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 4.3% in July 2024.

  • Breakdowns by age group (which rely on non-seasonally adjusted data) show broad-based increases across age groups over the year in London. This rise is particularly pronounced for Londoners aged 35-55. Trends in London are similar to UK-wide trends, altough for each age group, the increase in claimant count is higher in London than in the UK.

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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 Apr 2024-Jun 2024

Number* (thousands)

Rate** (%)

Latest Estimate

Change on Quarter

Change on Year

Latest Estimate

Change on Quarter

Change on Year

Employment

London

4,778

52

t

143

t

75.1

0.7

t

1.6

t

England

28,175

95

t

-76

u

75.0

0.1

t

-0.6

u

UK

33,094

97

t

-69

u

74.5

0.1

t

-0.7

u

Unemployment

London

265

37

t

14

t

5.3

0.7

t

0.1

t

England

1,242

-56

u

-10

u

4.2

-0.2

u

0.0

v

UK

1,435

-51

u

-25

u

4.2

-0.2

u

-0.1

u

Economic Inactivity

London

1,263

-87

u

-104

u

20.7

-1.4

u

-1.8

u

England

7,756

24

t

288

t

21.6

0.0

v

0.7

t

UK

9,410

27

t

350

t

22.2

0.0

v

0.7

t

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 June 2024 and real-time information (RTI) data up to July 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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