January 2026 UK Economy and Labour Market Report

The UK economy is in a period of adaptation. Businesses are navigating evolving markets, technological change and shifting workforce demands, with AI, data and digital transformation reshaping how organisations operate and deliver value.

At a glance

  • Unemployment rate: approximately 5.1%, up on the previous quarter
  • UK employment rate: 75.1% (Sep–Nov 25)
  • Economic inactivity: broadly stable at around 21%
  • Earnings growth: 4.5% excluding bonuses (quarter ending Nov 25)
  • Inflation (CPI): 3.4% (Dec 2025)
  • Bank Rate: 3.75%
  • Job vacancies: 734,000 (Oct–Dec 2025)
  • New job postings: 573,597 in Dec 25, down 8.2% on the month
  • Business investment growth: +1.5% (Q3 2025)

Data source: Office for National Statistics, Recruitment & Employment Confederation, Change Specialists Ltd.

About these figures. These are the statistics as the Office for National Statistics published them at the time of this report. ONS routinely revises Labour Force Survey estimates afterwards, so today’s figures for the same period may differ slightly. For the latest official figures, see our UK labour market tracker, which is refreshed daily direct from ONS and the Bank of England.

What it means

Hiring activity. The labour market continues to slow, with employers cutting back on hiring and redundancies increasing.

Skills shortages persist. Specific sectors still cannot find the people they need, so flexible hiring solutions remain key — particularly in healthcare, logistics and IT.

Investment is cautious. Monetary policy stability creates careful investment behaviour, especially in capital-intensive sectors. Business investment peaked in Q1 2025, dipped in Q2 and recovered modestly in Q3.

Organisations that maintain active programme portfolios — combining technology adoption with workforce capability building — are best placed to respond quickly and sustainably.

Written by Julian Brown, Practice Director, Change Specialists.

Why Many New Year Resolutions Fail at Work - How To Make Change Stick

Why Many New Year Resolutions Fail at Work – How To Make Change Stick

To kick off our 2026 blog series Change Specialists Practice Director Julian Brown explores why many new year resolutions fail at work, and shares his tips on how to make change stick.

January always feels like a fresh start. As a Practice Director partnering with organisations implementing business change and digital transformation, I see it every year: leaders arrive full of ambition, ready to launch new strategies, tools, and ways of working.

But so often many of these changes quietly fade by February.

Why? Because real change isn’t about big launches, glossy communications, or even clever technology. It requires an approach that embeds behaviours into daily work, and that’s often the hardest part.

The Challenge: Change Fizzles Out

I’ve worked with teams where the plans were excellent on paper: new processes, shiny dashboards, even updated KPIs. But a few months in, old habits creep back. People go back to doing what they’ve always done, not because they resist change, but because change wasn’t truly built into the way they work.

3 Things I Focus On to Make Change Stick

Habits over hype
I often say: ‘Change is more than a project, it’s a habit.’ Identifying small, repeatable behaviours that make a big difference. These are the things that, if consistently done, will embed the change naturally.

Middle managers are the glue
Everyone talks about leaders and frontline teams. However middle managers are the ones who translate strategy into action. Supporting them to lead change, make decisions, and coach their teams is non negotiable if you want sustainable transformation.

Measure what matters
It’s tempting to track everything, but metrics only help if they drive the right behaviours. Focus on a few key measures that show whether change is really happening in daily work, not just in reports.

My January Check-In

This month, I’m checking in with myself: what changes am I making that will actually last? Which of my own habits support that, and which ones are slipping back?

I encourage you to do the same. Ask yourself and your team:

  • What small adjustments could make a big difference?
  • Which changes are already part of your daily routines?
  • Where are old habits creeping back?

A thought to leave you with

Sustainable change isn’t just about launching more initiatives. It’s about embedding the right habits, supporting the people in the middle, and measuring what matters.

I’d love to hear from you: what’s one change you’re making this month that you know will stick, and why? Share your experience in the comments, I find the best lessons come from real world stories.

Contact me, Julian Brown, or the wider team at Change Specialists – all seasoned Change professionals who are well placed to share our experiences and expertise to support your success.

Connect with Julian via LinkedIn.

You can Follow Change Specialists to access further tips to support successful project management.