Scotland’s unemployment rate increased in the first quarter of 2025, according to new figures from the Office for National Statistics. The unemployment rate for people aged 16 and over reached 4.3% between January and March, marking a rise of 0.5 percentage points from the previous quarter.
Despite this increase, the Scottish rate remains below the UK average of 4.5% and is 0.2 percentage points lower than the same period last year.
A total of 119,000 people in Scotland were out of work during the quarter. At the same time, the proportion of people in employment rose to 74.5%, up 0.4 percentage points from the previous quarter, with 2,662,000 people in work.
Deputy First Minister Kate Forbes commented on the figures, stating: “It’s encouraging to see the number of payrolled employees in Scotland remains high and their median monthly pay is close to the highest on record and higher than the UK overall.”
She highlighted ongoing government initiatives, saying, “With global challenges impacting the economy, our Programme for Government outlines measures to create jobs and drive growth – this includes launching both Invest Scotland to showcase inward investment opportunities and the First Minister’s Start-up Challenge to support innovative businesses to start and grow.”
Forbes also called for action from Westminster, adding, “We need firm action from the UK Government to boost growth – for example by reversing the decision to raise employers’ National Insurance Contributions”.
Early estimates from HM Revenue and Customs indicate that the number of payrolled employees in Scotland fell to 2.45 million in April, 3,000 fewer than in March and 12,000 fewer than in April 2024.
Industry comments
Luke Bartholomew, Deputy Chief Economist, at Aberdeen said: “While the labour market continues to slow, and there is some evidence of the impact of the increase in national insurance and in the HMRC payrolls data, there is nothing to suggest it immediately fell off a cliff in response to the shock.
“Combined with the better trade news recently, there is nothing here to make the Bank of England regret its decision to say the easing cycle will continue to be only “gradual”.
Professor Joe Nellis is economic adviser to MHA, the accountancy and advisory firm, said: “The unemployment figure has finally moved to 4.5% after remaining at 4.4% since November 2024.
“The UK labour market continues to be tight, reflected by a period of relatively low unemployment and consistently high earnings growth — an earnings growth figure of 5.6%means that wage rises stay considerably above inflation as demand for labour pushes wages up.
“As a driver of inflation, this persistent high wage growth is something that the Bank of England has their eye on. If it continues, it will be a sore spot for an already divided Monetary Policy Committee as it explores further interest rates cuts this year.
“Nonetheless, the market is likely to shift under increased pressures as the year progresses. Job vacancies have been decreasing since mid-2022 and have once again fallen for the quarter February to April 2025 — compared to February to April 2024, there are 131,000 (14.7%) less vacancies in the UK.
“With these increased pressures on the labour market, we will finally begin to see some movement in unemployment, although not in a positive direction.
“As increased costs bear down on employers, jobs may be lost and recruitment will slow, and unemployment will lurch upwards towards 5%. Unemployment was last at 5% in April 2021 as we emerged from lockdown, but we are likely to reach this figure again by the end of the year.”
The latest figures reflect a complex economic environment, with both employment and unemployment rising in Scotland. The government continues to focus on job creation and support for key sectors, while urging further support from the UK Government to sustain growth
