The number of job vacancies in the UK has fallen to its lowest level in five years, as businesses become increasingly cautious about taking on new staff, official figures show.
The Office for National Statistics (ONS) said vacancies stood at 707,000 in the March to May period, the lowest since February to April 2021. While the labour market remains “broadly stable”, the ONS warned of signs of weakening.
“Job vacancies fall to 707,000, lowest since 2021, as firms grow cautious about hiring.”
The professional services sector recorded the largest drop in vacancies, followed by retail and hospitality. Separate data from HM Revenue & Customs revealed that new recruits – or ‘inflows’ – fell to just under 540,000 in April, the lowest monthly figure since March 2021 and a five-year low.
Liz McKeown, the ONS’s director of economic statistics, said the further decline in vacancies suggested that “firms are becoming more cautious about taking on new staff”. She added that against a backdrop of falling vacancies, there were “some signs of workers moving into self-employment”.
The unemployment rate fell slightly to 4.9% in the three months to April, down from 5% in the three months to March. Regular pay – excluding bonuses – grew at an annual rate of 3.4%, unchanged from the previous period, meaning average earnings are still rising slightly faster than prices. However, McKeown noted that private-sector regular wage growth was rising at its lowest rate in five and a half years.
Jamie Younger, who opened The Victory pub in south London last month, said rises to the minimum wage and national insurance contributions had “made life very difficult”. He said many pubs and restaurants now only hire people with several years’ experience, “rather than trying to support a younger generation and get them into their first job”. Cutting VAT – a measure called for by hospitality groups – would help ease the pressure and “give us the opportunity to train young people”, he added. “There is a benefit of employing someone in their first job because you get to train them… and mould that person,” he said. “But with the financial restrictions it’s becoming harder and harder every day.”
Sasha Swann, a student working in the pub’s kitchen over the summer, said she had been thrown in “at the deep end… but it’s made me learn so much”. Yet she said she was “extremely fearful” about entering the world of work after university. “It’s all up in the air whether we are going to get those jobs.”
Shazia Ejaz, the Recruitment and Employment Confederation’s director of campaigns, said: “Global pressures and domestic political uncertainty are making employers hesitant to commit to hiring.”