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UK job vacancies hit five-year low as smaller firms cut hiring

Vacancy numbers fell to 707,000 in the May-to-July period, while unemployment stayed at 4.9% and private-sector regular pay growth eased to 2.8%.

Reported · Written up by our desk · Europe

UK job vacancies have dropped to their lowest level in more than five years, as smaller businesses scaled back recruitment, according to new official data cited by BBC Business. The Office for National Statistics reported vacancies dipped slightly to 707,000 over the May-to-July period.

The ONS said small firms were pointing to labour and operating costs as key reasons for hiring pauses, while the labour market was broadly unchanged overall. Unemployment remained at 4.9%, and regular earnings rose at an overall annual pace of 3.5% in the three months to June, with the increase largely driven by public sector wage timing.

BBC Business also reported that public sector regular pay growth accelerated to 6.1%, while private-sector regular earnings growth dipped to 2.8%. Analysts said pay increases were not showing inflationary pressure signals, making it less likely the Bank of England would change course when it meets in September.

The story quoted commentators arguing that, with underlying wage pressures contained, there is little reason for the Bank of England to move rates in the near term, with expectations that policy would remain on hold for the rest of the year. It also noted energy costs have risen since the Iran war outbreak, alongside complaints that higher National Insurance and the minimum wage have increased the cost of employing staff.

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