The data, covering the period from February to April 2025, reveals a nuanced picture of rising employment and unemployment rates alongside persistent wage pressures.

Ann Frances Cooney, employment expert and partner at DWF, commented: “The latest Scottish labour market figures for the period February to April 2025 show some signs of cooling in a challenging economic environment.

“The estimates indicate that over the quarter, the economic inactivity rate decreased while the employment and unemployment rates increased. The headline figures for this period show the employment rate in Scotland was estimated at 75%, up 0.9% over the quarter.

“By way of comparison Scotland’s employment rate was slightly lower than the UK rate of 75.1%. The unemployment rate was estimated at 4.2%, up 0.4% over the quarter. Scotland’s unemployment rate was below the UK rate of 4.6%.”

Ms Cooney continued: “The early seasonally adjusted estimates for May 2025 from HMRC Pay As You Earn Real Time Information indicate that median monthly pay for payrolled employees in Scotland was £2,542, an increase of 5.3% compared with May 2024.

“Pay is a real pinch point for the employer/employee relationship with employers battling to keep rising costs under control and employees seeking pay increases to maintain standards of living.

“The rise in employer National Insurance contributions, the increased National Living Wage and the raft of new employment law legislation in the pipeline are all impacting the labour market. Understandably employers are taking a cautious approach to recruitment and pay.

“However, during such turbulent times it is crucial for employers to not lose sight of the importance of attracting and retaining core talent to help ensure productivity does not wane. Workplace culture and employee engagement are of paramount importance.”

Deputy First Minister Kate Forbes said: “These figures show Scotland’s labour market remains resilient despite global challenges impacting the economy. It’s encouraging to see that the number of payrolled employees in Scotland remains high and their median monthly pay is higher than the UK overall.

“Our Programme for Government outlines measures to create jobs and drive growth. But we need firm action in tomorrow’s UK government Spending Review – for example by fully funding the rise in employers’ National Insurance Contributions to vital public services like the NHS.”