The number of job vacancies in the UK has tumbled to its lowest level in five years, official figures show, as businesses cut back on recruitment amid rising costs and political uncertainty.
The Office for National Statistics (ONS) said vacancies in the March to May period fell to 707,000 – the lowest since February to April 2021. While the labour market remained “broadly stable”, some areas showed signs of weakening, the ONS added.
“Job vacancies fell to 707,000, the lowest since 2021, as firms become cautious about hiring.”
Liz McKeown, the ONS’s director of economic statistics, said the further drop in vacancies suggested that “firms are becoming more cautious about taking on new staff”. The professional services sector saw the largest fall, followed by significant drops in retail and hospitality.
Data from HM Revenue and Customs underscored the slowdown: the number of new recruits – known as “inflows” – hit just under 540,000 in April, the lowest monthly figure since March 2021. McKeown noted there were “some signs of workers moving into self employment” against a backdrop of falling vacancies.
The unemployment rate fell slightly to 4.9% in the three months to April, 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 and still slightly outpacing prices. However, McKeown said wage growth in the private sector 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 were now only hiring people with several years’ experience, “rather than trying to support a younger generation and get them into their first job”. Cutting VAT would 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”. Despite that, 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, director of campaigns at the Recruitment and Employment Confederation, said: “Global pressures and domestic political uncertainty are making employers hesitant to commit to hiring.”