Vacancies drop to 5-year low as firms delay hiring
Published: 04:07 PM,Jul 22,2026 | EDITED : 08:07 PM,Jul 22,2026
Vacancies in the UK have slumped to their lowest level in more than five years as firms put recruitment on hold in the face of economic uncertainty and soaring wage costs.
The Office for National Statistics (ONS) said vacancies fell by 19,000 quarter-on-quarter, to 707,000, in the three months to May, which is the lowest since the three months to April 2021.
The ONS said the drop in vacancies was significant across retail and hospitality sectors and smaller employers, while the largest fall in the quarter was in professional services. The lowest figures show Britain’s rate of unemployment edged lower to 4.9 per cent in the three months to April, down from 5 per cent in the three months to March.
The number of workers on payrolls fell by 53,000 during April, to 30.3 million, but the more timely flash estimate showed a rise of 2,000 in May, though the ONS stressed this is subject to revision.
Wage growth remained unchanged at 3.4 per cent in the three months to April after recently easing back and continues to outstrip inflation rising by 0.3 per cent, after taking Consumer Prices Index inflation into account.
But regular private sector earnings growth fell to its lowest level for six years at 2.9 per cent.
The data was published before the Bank of England’s interest rate decision last month to hold the rate at 3.75 per cent. ONS director of economic statistics, Liz McKeown, said: “The labour market remained broadly stable in the latest quarter, with further softening evident in some measures. Payroll numbers continued to fall over this period, with new recruits at their lowest level in five years.”
She added there were “some signs of workers moving into self-employment”, while the vacancies decline signalled firms are “becoming more cautious about taking on new staff”. The ONS said its vacancies survey showed some firms are putting recruitment on hold.
The Government increased employee national insurance contributions in April last year, while firms have also been hit by above-inflation rises in the minimum wage. Employee-heavy sectors such as retail and hospitality have been hit particularly hard by the changes.
Long-term unemployment: The number of people in long-term unemployment has risen to its highest level in a decade.
There are now 474,000 people in long-term unemployment, according to the ONS, which accounts for anyone who has spent more than twelve months out of work. This is the highest level since January 2016.
An additional 129,000 people have been classed as long-term unemployed since Labour came to power in July 2024, highlighting the extent to which former chancellor Rachel Reeves’s tax rises have damaged the jobs market.
The recent surge in prolonged joblessness is particularly concerning as economists believe that the longer a person remains out of work, the more challenging it is for them to find a job.
This risks weakening growth as unemployment holds back productivity, reduces tax revenue and hinders consumer spending.
The chief executive of Learning and Work Institute, Stephen Evans, said: “The risk is that should the economy pick up, they’ll find it more difficult to get back to work.
Nipping long-term unemployment in the bud really is massively important for the prospects of the economy, as well as for those individuals.”
Evans warned that for young people, even short periods of unemployment can be severely damaging to their career prospects. Official figures show that the rate of unemployment for 16 to 24-years-olds recently climbed to 16.2 per cent, its highest level since January 2015. The latest official figures show the number of 18-to 24-year-olds in long-term unemployment has more than doubled since 2016.
Economist at the National Institute of Economic and Social Research, Fergus Jimenez-England said young people were bearing the brunt of the nation’s cooling job market.