West Midlands unemployment rate dips slightly as national levels stay highest in five years, latest figures show

For the three months from September to November 2025, 73.7 per cent of 16 to 64 year olds in the West Midlands were in work, an increase of 0.5 per cent on the three months from June to August.

The percentage of people aged 16 or over who were unemployed was 5.9 per cent, down 0.3 per cent over the same period. The inactivity rate among 16 to 64 year olds was 21.5 per cent, a drop of 0.3 per cent over the same quarterly period.

There were a total of 2.953 million people in employment across the West Midlands -  up 2,000 on the quarter and up 23,000 on the year, while 184,000 were unemployed, down 11,000 on the quarter and up 42,000 on the year.

Nationally, wage growth has fallen back once again while the unemployment rate has remained at the highest level for nearly five years.

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The newly published data also suggests deepening problems in the retail and hospitality sectors. The ONS said average regular earnings growth fell to 4.5 per cent in the three months to November, down from 4.6 per cent in the previous three months and staying at the lowest since April 2022.

With Consumer Prices Index inflation taken into account, wages were 0.9 per cent higher. The ONS said the rate of UK unemployment remained unchanged at 5.1 per cent in the latest three months, against expectations for a drop to five per cent.

Other figures estimated the number of employees on payrolls fell 43,000 in December, with some of the biggest falls in the hard-hit retail and hospitality sectors.

The monthly estimate was the biggest decline since November 2020 at the height of the pandemic although the figure is subject to revision.

But the data showed a welcome rise in vacancies, up 10,000 to 734,000 - the biggest increase since the second quarter of 2022.

ONS director of economic statistics Liz McKeown said: "The number of employees on payroll has fallen again, with reductions over the last year concentrated in retail and hospitality, and reflecting ongoing weak hiring activity.

"While there was a slight increase in vacancies in the latest period, the overall number has remained broadly flat over the last six months, following a long decline.

"Wage growth in the private sector has slowed to its lowest rate in five years while public sector wage growth remains elevated reflecting the continued impact of some pay rises being awarded earlier than they were last year."

The data showed a 72,000 fall in payrolled employees year-on-year in the wholesale and retail sector, with a 21,000 estimated drop between November and December.

In hospitality, payrolled employees dropped 70,000 annually, with a 9,000 fall in December alone.

The sectors have been knocked hard by soaring employment costs over the past year following last year's hike in National Insurance contributions and minimum wage increases.

Wage growth in the private sector, which is closely watched by interest rate setters at the Bank of England, fell to 3.6 per cent in the three months to November which is the lowest since 2020.

Economists said the figures confirmed a weakening labour market but added the Bank was unlikely to cut rates again when it next decides in February.

The Bank reduced rates to 3.75 per cent from four per cent in December, marking the fourth cut last year, as inflation fell.