Unemployment rate falls but firms remain cautious about hiring - Chamber

Unemployment in the West Midlands has fallen slightly, although firms remain cautious about hiring, business leaders said today.

The region’s unemployment rate fell by 0.3 per cent in the September 2025 to November 2025, according to new figures from the Office for National Statistics (ONS).

Employment rose by 0.5 per cent in the same period.

However, compared to the same period last year, the jobless rate has increased by 1.2 per cent – the third largest increase of any region in the UK.

In comparison, the national unemployment rate has risen by 0.7 per cent over the year.

Emily Stubbs (pictured), head of policy at Greater Birmingham Chambers of Commerce, said: “Today’s figures suggest some easing in regional pressures for local businesses, but they also reflect a labour market that is still loosening, with many residents unable to access job opportunities.

“Local firms tell us rising employment costs and uncertainty around forthcoming employment law changes are leading many to pause recruitment and think twice about backfilling roles.

“This combination - more people looking for work while employers hire more cautiously - helps explain why unemployment remains elevated in the West Midlands even as inactivity edges down.

“For many businesses, wage bills and wider operating costs are still squeezing margins, and demand in key sectors is inconsistent, in part due to turbulence in global trading relationships.

“Added to this we now have fresh uncertainty emerging around tariffs and businesses will be looking to government for clear signs that it understands the difficulties they face. 

“Without targeted relief and a sharper focus on skills and workforce health, we risk seeing potential job creation stall before it starts.

“We urge the government to prioritise easing cost pressures, provide clarity and pacing on employment law changes, and work with regional partners to accelerate practical interventions on skills, workforce health and transport - so West Midlands firms can attract, develop and retain the talent they need to grow.”

Meanwhile, wage growth in the UK eased to 4.5 per cent, following a slowdown in private sector pay increases.

The pace of pay growth for those employed by private businesses slowed to the lowest rate in five years, the ONS said.

In contrast, public sector workers saw their wages jump.

The ONS said this was likely due to pay rises being awarded earlier than in the previous year.

Meanwhile, the number of people on company payrolls continued to fall - down 135,000 in the three months to November - with a particular decline in shops and hospitality.

Average wages, excluding bonuses, slowed from a 4.6 per cent rise recorded between August and October.