UK job vacancies hit five-year low as small firms cut hiring

Job vacancies in the United Kingdom fell to a five‑year low during the May‑to‑July quarter, with the Office for National Statistics (ONS) reporting 707,000 openings. The drop is the smallest number of vacancies recorded in more than half a decade. Small businesses are the main drivers of the decline, as they say rising labour and operating costs are forcing them to scale back hiring.

The ONS said the labour market remained broadly unchanged. Unemployment stayed at 4.9%, the same level as in previous months. While the number of people looking for work has not surged, the number of positions available has tightened. The data suggest that employers are not expanding as quickly as they once did, even as the economy continues to grow.

Regular earnings – wages that exclude bonuses – grew at an annual rate of 3.5% in the three months to June. This rise in pay is a sign that workers are still earning more, but the cost of hiring new staff is pushing many small firms to hold back. The ONS notes that the cost of living crisis and higher energy bills are part of the backdrop, making it harder for businesses to afford new hires.

If the trend continues, the gap between supply and demand for workers could widen, putting pressure on wages and potentially slowing economic growth. Policymakers and business groups are watching the figures closely, hoping that the economy’s current expansion will translate into more job openings. For now, the low vacancy count signals a cautious hiring environment, even as earnings climb and the broader economy shows resilience.