UK Jobs Market Cools as Vacancies Drop
Official data reveals a decline in job openings and payroll numbers, amid steady wage growth and a stable unemployment rate.
The UK labour market continues to cool as vacancies fall and payroll numbers decline, according to official data.
Job openings fell by 5.8% to 718,000 between May and July, the Office for National Statistics said. This decline was broad-based, suggesting firms are delaying recruitment or not replacing leavers. However, the slowdown was less steep than expected.
Average pay growth held at 5%, unemployment remained at 4.7%, and payrolls dipped by 8,000 from June to July, signalling a gradual cooling, said former Bank of England policymaker Andrew Sentence.
Economic pressures include April's National Living Wage rise from £11.44 to £12.21, higher employer National Insurance contributions, and a lower salary threshold for contributions.
Vacancies are at their lowest since April 2021, outside the pandemic only previously recorded in early 2015. Hospitality and retail saw the largest payroll drops, ONS director Liz McKeown said.
Despite fewer openings, unemployment has not risen significantly and redundancy notices remained subdued in July, said Capital Economics economist Ashley Webb.
Monica George Michail, of the National Institute of Economic and Social Research, warned that falling vacancies could slow wage growth—a key factor for the Bank of England’s interest rate decisions. She expects one more rate cut this year, from 4% to 3.75% in November.
The latest data show a steady but moderate cooling of the UK jobs market, driven by reduced vacancies and modest payroll declines impacting wage and policy outlooks.
This topic was reported by BBC News.
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