The UK’s job market isn’t as strong as it used to be. Recent figures show that fewer people are on company payrolls and the number of job openings is on the decline.
In March, about 47,000 jobs were cut, and in April, an estimated 33,000 more roles disappeared. That’s a consistent drop that points to businesses making careful decisions about hiring.
Vacancies are also following the same pattern. Between February and April 2025, the number of job openings fell by 42,000, landing at around 761,000 vacancies across the country. While this might still seem like a decent number, the steady decline is a sign that employers are becoming more cautious.
What does this mean for job seekers? Simply put, fewer opportunities and tougher competition. If you’re thinking about switching careers or looking for a new role, you might find the process a bit more competitive in the coming months.
New Costs Are Changing How Companies Hire
Higher National Insurance and Minimum Wage Impact
One major shift happened in April: businesses faced higher National Insurance contributions and an increase in the National Living Wage. While these changes were meant to support workers, they’ve also had a ripple effect on hiring.
For smaller companies or those operating on tight budgets, these added expenses mean they have to make tough choices. Some might hold off on hiring altogether, while others could trim down their workforce to manage costs better.
Even though wage growth slowed a bit, workers are still earning more. Regular pay (not including bonuses) increased by 5.6% in the first three months of the year. The good news here is that pay is still rising faster than inflation, meaning workers are seeing real gains in their take-home earnings.
But there’s a flip side. If wages keep rising at this pace, it could lead businesses to raise their prices, which in turn could push inflation back up. That’s something policymakers are watching closely.
Unemployment Inches Up – But Caution is Warranted
According to the latest data, the UK’s unemployment rate rose slightly to 4.5% from 4.4% during January to March. This isn’t a huge jump, but it’s another signal that the job market is softening.
That said, there’s a bit of uncertainty around these numbers. The Office for National Statistics (ONS) noted that fewer people have been responding to their labour surveys lately, so these figures should be taken with a pinch of salt.
Still, the general trend is clear: job growth is slowing, and unemployment is nudging upward. It’s not a red flag just yet, but it does show that the market isn’t as robust as it once was.
Businesses Are Feeling the Pressure
A separate survey released recently paints an even bleaker picture. It showed that the number of employers planning to hire more staff in the next three months is at a record low—excluding the worst periods of the pandemic.
Economists are connecting this directly to the rise in business costs. Ruth Gregory, a senior economist at Capital Economics, said the continued job losses in April suggest that companies are reacting to these costs by cutting back on their teams.
And while wage growth is still solid, Gregory noted that it might slow down future interest rate cuts by the Bank of England. Why? Because strong wages can lead to price hikes, which fuels inflation—the exact thing interest rate hikes are meant to control.
The Bank did cut rates recently, and they’ve hinted that more cuts could follow. But they’re doing it slowly. As Governor Andrew Bailey put it, they’re moving “gradually and carefully” to avoid any major economic shocks.
Luke Bartholomew, another economist, added that while the labour market is clearly cooling, there’s no sign of a crash. Businesses are adapting, but they’re not panicking. It’s a slow shift, not a sudden drop.
What This Means for Workers and Job Seekers
If you’re in the market for a job—or thinking about switching careers—here are a few things to keep in mind:
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Job competition is increasing: With fewer roles available, it’s more important than ever to make your CV and interview skills stand out.
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Employers are being cautious: Many are thinking twice before hiring or expanding teams.
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Wages are still rising: That’s good news if you’re negotiating a salary or considering a move, but it may not last forever if hiring continues to slow.
For business owners and hiring managers, this is a time to reassess staffing needs. It’s also a good opportunity to invest in training and development for existing staff rather than rushing to bring in new talent.
In Summary: The UK’s Job Market Is Slowing, But Not Stopping
So, what’s the big picture here?
The UK’s labour market is cooling off. We’re seeing fewer people on payrolls, more job seekers competing for fewer roles, and cautious moves from employers who are navigating new cost pressures.
At the same time, workers are still enjoying some wage growth, which helps offset inflation and rising living costs. But there’s a delicate balance at play—too much wage growth could push inflation back up, which might delay future interest rate cuts.
The changes in National Insurance and minimum wage policies are shaping how businesses operate, and it’s clear that these shifts are having a real impact on hiring decisions.
It’s not all doom and gloom. The market isn’t collapsing. But it is getting tougher, and being prepared—whether you’re a job seeker, an employee, or an employer—has never been more important.
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