17th February 2026
The UK jobless rate climbed to 5.2% in the three months to December 2025, up from 5.1% previously - the highest level since early 2021 outside the pandemic period. The latest figures from ONS show Scotland doing better than the south.
This reflects weak hiring and higher unemployment overall, with particularly strong competition for jobs.
The number of unemployed people per job vacancy has gone up to around 2.6, meaning more people are competing for each available job.
Payroll employment is weakening
Figures show the number of people on payrolls declined in January and is lower than a year ago.
Data indicates employment is still large in absolute terms, but recent monthly and annual changes suggest the market is now weaker than before.
Wage growth is slowing
Annual wage growth (excluding bonuses) eased to about 4.2%, down from higher rates previously.
Private sector pay growth is especially soft, while public sector wages remain relatively higher due to earlier pay settlements.
When adjusted for inflation, real wage increases are modest, meaning workers' earnings are growing only slightly faster than prices.
Broader indicators show cooling in the labour market
Declines in jobs on payrolls and slower wage growth are consistent with a labour market cooling down, rather than continuing rapid expansion.
These signs feed into expectations that monetary policy (such as interest rate decisions by the Bank of England) could shift if the labour market continues weakening.
What this means in context
The rise in unemployment suggests the jobs market is no longer tightening and firms are hiring less strongly than before.
Slower wage growth points to less upward pressure on earnings, which can influence inflation and consumer spending.
For workers and jobseekers, this data indicates a more competitive market, especially for new entrants or less experienced workers.
Scotland
Here's how Office for National Statistics (ONS) labour market data suggests **Scotland compares with the rest of the **United Kingdom — especially as recent UK figures show unemployment rising:
Unemployment rates: Scotland lower than UK average
According to the latest ONS‑based Scottish Government statistics, the unemployment rate in Scotland was around 3.7% for September-November 2025 — noticeably lower than the UK average of about 5.1% for roughly the same period.
Historically, Scotland's unemployment rate has tended to be below the UK rate in recent quarters, with earlier figures also showing Scotland around 3.8-3.9% compared with higher UK rates over 4.7-5.0%.
In other words: while the UK overall has seen unemployment rise to its highest levels in several years, Scotland's unemployment rate has generally remained lower than the UK average.
Employment (people in work)
ONS‑derived Scottish Government data indicates that Scotland’s employment rate (the share of people aged 16–64 in work) was about 74.7% over the latest quarter — slightly below the UK rate of around 75.1%.
This suggests that while more Scots as a proportion of the working‑age population are in work compared with some historical periods, Scotland’s employment rate is close to but modestly below the UK average.
Economic inactivity
Scotland’s economic inactivity rate (people not working and not actively looking for work) was slightly higher than the UK average — about 22.3% in Scotland versus around 20.8% across the UK.
This reflects broader demographic and labour market differences — such as variations in education, caring responsibilities, or long‑term health factors — that influence inactivity alongside unemployment.
So what does this mean?
Scotland has generally had lower unemployment
Even as UK unemployment has risen to around 5.2%, Scotland’s rate has stayed lower (around 3.7–3.9%) in recent ONS survey periods.
This doesn’t necessarily mean Scotland’s labour market is booming, but it suggests Scotland has, at least in these latest estimates, fared better across headline unemployment figures than the UK average.
However, Scotland still faces challenges
The employment rate in Scotland is slightly below the UK level — meaning a slightly lower share of working‑age people are in employment overall.
Economic inactivity remains a bit higher in Scotland, indicating a larger pool of people not seeking work compared with the rest of the UK.
Amid a broader UK backdrop of rising unemployment and a cooling labour market, Scotland’s unemployment rate has remained comparatively lower, although its employment rate is slightly below the UK average and economic inactivity is somewhat higher. This paints a mixed picture: Scotland’s labour market has shown resilience on jobs, but structural factors like inactivity and participation remain important considerations.