UK Job Vacancies Plunge as Labour Market Shows Signs of Fragility

Official figures from the Office for National Statistics show that job vacancies fell to 712,000 in the three months to May, “almost half the level in 2022.” Unemployment held steady at 4.9 %, matching April’s rate, while private-sector earnings growth slipped to 2.9 %, leaving the overall rise in earnings (including bonuses) at 4.3 %. Economists had expected a modest rise in pay and a slight increase in unemployment to 5 %, indicating that the labour market is weakening faster than forecasts.

The Guardian

Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales (ICAEW), described the data as evidence of a “fragile labour market.” He linked the drop in vacancies to “soaring employment taxes and the economic turbulence sparked by the Iran war,” which he says are prompting firms to curb recruitment and reduce pay awards. Thiru warned that “the continued fall in job vacancies is a stark warning that demand for staff is dissipating under the weight of sky-high staffing costs, more onerous regulation and heightened uncertainty.”

The Guardian

The newly appointed prime minister has pledged a ten-year plan to raise living standards across all regions, while Greater Manchester Mayor Andy Burnham faces pressure to revitalise the local economy. Bank of England officials have voiced concern that “pay remaining stubbornly high” is adding to production costs and sustaining inflationary pressure, suggesting that the slowdown in private-sector pay growth could ease pressure on future interest-rate decisions.

The Guardian

• “Job vacancies fell to 712,000 – almost half the level in 2022 – as employers put off hiring new staff in the three months to May, the Office for National Statistics said.” — Office for National Statistics

The Guardian

• “Suren Thiru, the chief economist at the accountancy body ICAEW, said: “These figures point to a fragile labour market, with soaring employment taxes and the economic turbulence sparked by the Iran war pushing some firms to limit recruitment and cut pay awards.” — Suren Thiru, ICAEW chief economist

The Guardian

• “The continued fall in job vacancies is a stark warning that demand for staff is dissipating under the weight of sky-high staffing costs, more onerous regulation and heightened uncertainty.” — Suren Thiru, ICAEW chief economist

The Guardian