UK job vacancies fall to lowest level in five years as small firms curb hiring

The Office for National Statistics reported that UK job vacancies decreased by roughly 8,000 quarter on quarter, leaving 702,000 openings - a level not seen since spring 2021 and the lowest outside the Covid period for more than ten years. The contraction is largely attributed to small enterprises that are hesitant to hire due to escalating labour costs. Average weekly earnings continued to rise at a 3.5% annual rate, still exceeding consumer price inflation.

The unemployment rate remained unchanged at 4.9% for the three months to July. More timely payroll data suggest a drop of 26,000 workers in August, following a 19,000 decline in July, bringing total employment to about 30.2 million, though these figures may be revised. Liz McKeown noted that the fall in payrolled staff is especially pronounced in retail and hospitality, and that the vacancy shortage reflects the pressure on smaller firms.