Full Breakdown
UK Labour Market Shows Weakening Hiring Amid Energy Shock
6/18/2026, 12:43:51 PM
Data & Statistics
ONS data for April show new hires under 540,000 – the lowest since March 2021 – and vacancies at 707,000, the lowest level since early 2021. Unemployment was 4.9%. Regular pay growth stayed at 3.4% annual, while private-sector wages fell to 2.9%, the weakest since 2020.
Background & Context
The labour data arrived as Britain grapples with the economic fallout from the Iran war, which has driven an energy shock and a plunge in global oil prices. Analysts also cite broader global pressures and domestic political uncertainty as factors dampening firms’ hiring confidence.
Official Statements & Responses
ONS director of economic statistics Liz McKeown said the drop in vacancies indicates firms are becoming more cautious about hiring. Ben Caswell, senior economist at the National Institute of Economic and Social Research, said the data show a gradual easing of the labour market. The Bank of England’s Monetary Policy Committee, which received the data early, is expected to keep the Bank Rate at 3.75%.
Criticism & Opposition
Shazia Ejas, director of campaigns at the Recruitment and Employment Confederation, said global pressures and domestic political uncertainty are making employers hesitant to commit to hiring, even as temporary staffing performs better than permanent. The ONS’s Labour Force Survey has been criticised for low response rates and “deep-seated” methodological issues, raising questions about the reliability of the figures.
Conflicting Reports & Gaps
Economists had forecast a 23,000-job drop in May, yet the ONS reported a 2,000 increase, highlighting a gap between expectations and actual data. The April employment loss was also revised from 100,000 to 53,000, underscoring uncertainty in real-time labour statistics.
Verbatim Quotes
- “firms are becoming more cautious about taking on new staff” — Liz McKeown, Director of Economic Statistics, ONS
- “ Shazia Ejas, the Recruitment and Employment Confederation's director of campaigns, said: "Global pressures and domestic political uncertainty are making employers hesitant to commit to hiring although latest REC data shows temp hiring is faring better than permanent.” — Shazia Ejas, Director of Campaigns, Recruitment and Employment Confederation
- “Today’s data provides the Bank of England with further tentative evidence that the recent energy shock is unlikely to lead to a renewed pick up in pay pressures.” — Yael Selfin, Chief Economist, KPMG UK
- “But the direction of travel is still clear: employment is weakening, pay growth is slowing, and the case for a Bank of England rate rise this week looks even thinner.” — Martin Beck, Chief Economist, WPI Strategy
What's Next
The Monetary Policy Committee is expected to leave the Bank Rate at 3.75% on Thursday, reflecting the weak labour market signals. Market participants will watch forthcoming payroll releases and any policy measures aimed at stimulating hiring, particularly in sectors where vacancies remain low.
