23 November 2025
UK labour market is cooling – CIPD Labour Market Outlook
CIPD’s latest Labour Market Outlook shows the UK labour market is cooling and wage growth is reducing. The quarterly briefing is based on feedback from over 2,000 employers across the UK.
While on average private sector employers feel their organisations will grow in the next three months, in the public sector it is more likely that they will shrink. Fewer organisations (13%) expect to have problems recruiting as the market cools.
In relation to the use of AI, three quarters of employers are using AI tools but only 17% expect AI to lead to a reduction in the size of their workforce in the next 12 months. Of those who do expect a reduction in headcount, only a quarter see that as being 10% or more of their headcount.
Overall pay growth intention is around 3%, with fewer pay rises of 5% or more than 12 months ago.
Read the CIPD’s Labour Market Outlook.
While on average private sector employers feel their organisations will grow in the next three months, in the public sector it is more likely that they will shrink. Fewer organisations (13%) expect to have problems recruiting as the market cools.
In relation to the use of AI, three quarters of employers are using AI tools but only 17% expect AI to lead to a reduction in the size of their workforce in the next 12 months. Of those who do expect a reduction in headcount, only a quarter see that as being 10% or more of their headcount.
Overall pay growth intention is around 3%, with fewer pay rises of 5% or more than 12 months ago.
Read the CIPD’s Labour Market Outlook.
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