If the grim November weather wasn’t enough to contend with the Office for National Statistics (ONS) Labour Market overview released today certainly sent the S.A.D. syndrome in to overdrive. The latest labour market release from the ONS paints a sobering picture of the UK economy. Over the past six months, employment has steadily declined, unemployment has crept upward, and wage growth—while still positive—has begun to lose momentum. As analysts digest the data, a question to be asked!: Should 2026 be the year the UK launches a large-scale employability programme?

What the Numbers Say

Between September 2024 and September 2025, the number of payrolled employees fell by 117,000—a 0.4% drop. The early estimate for October 2025 suggests an even sharper annual decline of 180,000, bringing the total to 30.3 million. While these figures are provisional, they reflect a consistent downward trend.

The Labour Force Survey (LFS) shows the employment rate for 16–64-year-olds at 75.0%, down on the quarter. Unemployment rose to 5.0%, its highest level since early 2021. Meanwhile, economic inactivity remains stubbornly high at 21.0%, with long-term sickness playing a significant role.

Vacancies have flatlined, with only a marginal increase of 2,000 to 723,000. The Claimant Count rose to 1.696 million in October, suggesting more people are turning to support systems as job opportunities dwindle.

What the Experts Are Saying

The Institute for Employment Studies (IES) described the release as evidence of a “weakening” labour market, noting that the employment rate is now at its lowest since early 2022. They warned that rising unemployment and falling employment could signal deeper structural issues.

The Learning and Work Institute focused on the persistent employment gap for disabled people and the record number of economically inactive individuals due to long-term health conditions. Their call for “urgent action” to support those out of work adds weight to the argument for a national employability programme.

PwC UK highlighted sectoral pain points, with retail, hospitality, and manufacturing shedding jobs. They noted that while vacancies have stabilized, the overall market is softening and wage growth is slowing.

The Resolution Foundation added that real pay growth—adjusted for inflation—is modest at best. Though nominal earnings rose by 4.6% (regular pay) and 4.8% (total pay), real growth was just 0.5% and 0.7% respectively when adjusted using CPIH. Public sector pay growth of 6.6% was largely attributed to early settlements rather than sustained momentum.

Where Do We Go From Here?

Economic indicators are flashing amber, the UK may be approaching a tipping point. The convergence of falling employment, rising inactivity, and sluggish wage growth suggests that passive policy responses may no longer suffice.

Could 2026 be the year of a major employability programme?

It’s not far-fetched. The groundwork is already being laid in policy circles, with increasing attention on health-related inactivity, regional disparities, and the need to reskill workers in declining sectors. A national initiative—perhaps akin to the Future Jobs Fund or Kickstart Scheme—could target long-term unemployed, young people, and those with health barriers to work.

The past six months have been challenging for the UK labour market. While the economy has avoided a sharp shock, the slow bleed of employment and the rise in inactivity are cause for concern. If policymakers heed the warnings from IES, PwC, and others, a national employability programme may not just be desirable—it may be essential.