The UK jobs market is sliding further downhill, with fresh data showing unemployment climbing, wage growth slowing, and companies pulling back on hiring.
Official figures for March to May show the unemployment rate creeping up to 4.7%, the highest in four years. The Office for National Statistics flagged issues with its survey methods, but the direction of travel is clear enough.
Pay growth has lost momentum too. Average wages, excluding bonuses, rose by 5% year-on-year, down from 5.3% in the previous period. The number of payrolled employees dropped again in May, with early figures for June suggesting no let-up in the losses.
Job vacancies are now down to 727,000, their lowest level outside lockdowns in over a decade. It’s the 36th straight quarterly decline in available roles, with most sectors offering fewer opportunities and many firms simply not bothering to replace people who leave.
The Bank of England has been dropping hints about rate cuts, and this latest batch of numbers is likely to tip the scales. Market bets are firming on a rate cut in August as the Bank faces the double squeeze of weak growth and a cooling labour market.
Business owners are already making cuts where they can, whether that means fewer shifts, shorter opening hours or delayed repairs. Higher employment taxes have made hiring decisions even tougher, with some choosing to leave vacancies unfilled rather than risk overextending.
Economists point to a combination of tax hikes, weaker demand and a general hiring freeze across large parts of the economy. With unemployment rising and pay growth easing, the pressure on policymakers to step in is rapidly building.
The data leaves little room for spin, fewer people are working, pay is rising more slowly, and businesses are scaling back. The labour market is not just cooling, it is closing doors.