The UK job market is showing signs of a slowdown despite the country’s growing economy. According to new research from job search engine Adzuna, job vacancies fell by nearly a fifth in June compared to the same time last year. The figures indicate that businesses remain cautious about expanding their workforces, even as the UK economy recorded growth in May.
Over the past month, the number of open roles dropped by 0.2 percent to 852,703. Andrew Hunter, co-founder of Adzuna, said, “The positive economic growth recorded in the first two quarters of the year has yet to filter through to hiring. While businesses may have paused their hiring plans because of the general election, compared with last year, hiring is down nearly a fifth across the UK.
This clearly indicates that the jobs sector has not fully recovered from the Covid pandemic.
The slowdown in hiring comes as the number of jobseekers continues to rise. Adzuna reported that there were 1.95 jobseekers for every vacancy in June, the highest level in three years. This trend often puts downward pressure on pay growth.
The Bank of England’s Monetary Policy Committee will meet later this week to decide whether to cut interest rates.
Job vacancies decline amidst economic growth
The weakness in the jobs market is likely to fuel speculation that the Bank will raise rates again, with financial markets seeing an even chance of this happening.
Members of the Bank’s rate-setting committee have emphasized that wage growth must ease and the labor market should rebalance before they can decide on interest rates. Despite the hiring slowdown, average starting salaries rose by 2.72 percent compared to June 2023, according to Adzuna. The average salary for each open role reached £38,843 last month, the highest this year.
Demand for workers varied by industry, with the professional services sector seeing the most substantial growth. Vacancies in the legal sector rose by 8.46 percent in June, while roles in PR firms were up 3.78 percent. In contrast, consumer-facing companies limited hiring due to weak spending.
Vacancies in the hospitality and catering sector dropped by 5.32 percent, a departure from the typical summer hiring increase. Regionally, Cambridge was the top city for job seekers, with the lowest ratio of candidates to roles at 0.35, followed by Guildford and Exeter. Bradford was the most complex city for job-hunting.
