Here’s how many jobs were lost under Starmer’s government – and how much wages grew
Key Points
- The UK lost around 156,000 payrolled jobs during Keir Starmer's time as Prime Minister, with unemployment rising from 4.1% to 4.9%
- Real average weekly earnings grew by £7 over the same period, from £692 to £699
- The real pay gap between London and Yorkshire and The Humber narrowed by £15 since July 2024
- Private sector wages have been shrinking in real terms since October 2025
- New Prime Minister Andy Burnham inherits a labour market with weak overall real wage growth of just 0.3%
The UK shed around 156,000 payrolled jobs and unemployment climbed from 4.1% to 4.9% under Keir Starmer’s government, while real wages grew by £7 a week, a new analysis by the Resolution Foundation shows.
The think tank published its analysis on Tuesday (21July) in response to the latest labour market statistics from the Office for National Statistics, describing the record Starmer has handed to new Prime Minister Andy Burnham as mixed.
The figures cover the period from the July 2024 general election to the most recent ONS data. Over that time, average weekly earnings continued to rise faster than inflation, climbing from £692 to £699 in real terms.
However, the Foundation warned that workers should brace for another squeeze on pay packets if tensions in the Middle East push inflation higher over the second half of the year.
The current picture offers little cheer for the incoming government. The unemployment rate sits at 4.9%, overall real wage growth stands at just 0.3%, and private sector wages have been falling in real terms since October.
Hannah Slaughter, Principal Economist at the Resolution Foundation, said the labour market has settled into a depressing holding pattern in mid 2026, with unemployment hovering close to 5% and real wages shrinking in the private sector.
“Looking at the period of the Starmer government, the labour market has shed around 156,000 payrolled jobs, with unemployment rising as a result, while real wages have grown by £7 a week,” she said.
Regional pay gaps narrow
The strongest part of Starmer’s record is the closing of the gap between the highest and lowest paying parts of the country.
Real pay growth in lower paying regions such as Yorkshire and The Humber and the North East outpaced London and the South East since the election. The gap in real pay between London and Yorkshire and The Humber fell by £15 since July 2024.
“Perhaps the most welcome legacy for the incoming Prime Minister has been falling regional pay gaps, with low paying areas like Yorkshire and the North East performing far better than London,” Slaughter said.
Rising unemployment means more people competing for fewer payrolled positions, while the divergence between public and private sector pay leaves millions of private sector workers watching their real earnings fall month after month.
The £7 weekly gain in average earnings over two years works out at roughly £364 a year, a modest cushion that higher inflation later in 2026 could quickly erode.
For workers in the North East and Yorkshire and The Humber, the narrowing gap with London represents a rare bright spot, though pay in those regions still trails the capital by a substantial margin.
