UK Labour Market Deteriorates As Vacancies Plummet

LONDON—The UK labour market saw a significant downturn last month, with job vacancies falling by 15.2% over the past year—the sharpest decline recorded in 2025, according to a Reuters report.

Data from the job search website Adzuna, online advertisements dropped by 6.4% from October to November, marking the fifth consecutive monthly fall. This hiring freeze has contributed to Britain’s unemployment rate climbing to 5.1%, the highest level since 2021.

Industry analysts suggest that employers have become increasingly cautious following the introduction of higher social security contributions in Finance Minister Rachel Reeves’ first budget last April. Persistent worries regarding further tax increases in the late November budget have continued to weigh on the recruitment market.

Despite the drop in available roles, Reuters highlights a paradox in pay:

Salary Growth: Average advertised salaries rose by 7.7% compared to a year earlier.

Sector Trends: The IT sector saw significant pay increases, with only two industries nationwide reporting a fall in wages.

This creates a difficult situation for the Bank of England. While the Bank recently cut interest rates to support a weakening economy, the continued rise in salaries maintains inflationary pressure, complicating future decisions on rate reductions.