New job adverts in the UK fell for the second consecutive month in November, highlighting signs that demand for workers is slowing as businesses contend with budget uncertainty and pending changes to employment law.
Data from the Recruitment and Employment Confederation (REC) showed that new job postings dropped by 14.4 per cent between October and November, while the total number of active vacancies fell by 11.2 per cent over the same period. The decline comes at a time when hiring usually accelerates in sectors such as retail and hospitality ahead of the Christmas season.
The REC attributed much of the slowdown to employers holding back recruitment in the run-up to Chancellor Jeremy Hunt’s budget on November 26 and waiting for clarity on the Employment Rights Bill. Although the bill was eased towards the end of November, it remains stalled in the House of Lords, where peers are calling for a cap on compensation payouts in unfair dismissal cases, a concern for many businesses.
Neil Carberry, chief executive of the REC, said the budget had unsettled companies, but the eventual outcome was less severe than expected. “While the budget was by no means an easy listen for companies, the overall picture was more benign for most sectors than feared,” he said. “We can hope that this, along with the more pragmatic tone the government has struck on the Employment Rights Bill over the past month, will help get the hiring market moving again.”
Official figures released last month showed the UK economy contracted by 0.1 per cent in October, with the Office for National Statistics noting that fiscal uncertainty had affected confidence, hiring plans, and investment decisions.
Despite the decline in vacancies, overall job openings remain historically high, with around 1.46 million roles available across the economy. Some sectors recorded month-on-month gains, including theme park attendants, stock control assistants, and public relations directors.
Retail and hospitality, however, saw sharp drops in active job postings, down 14.1 per cent and 10.4 per cent respectively. Both sectors have been hit by rising costs, including the increase in employers’ national insurance contributions introduced in April.
The number of vacancies has generally been trending downward over the past two years as the post-pandemic labour market cools. The Bank of England monitors vacancy data, particularly the ratio of unemployed people to available jobs, as an indicator of labour market tightness and inflationary pressures. That ratio has risen from 1.8 unemployed individuals per vacancy last year to 2.5 by July, signalling a loosening in the jobs market.
Attention is now turning to the official employment and wage growth figures for the three months to October, due to be published on Tuesday. Economists expect the unemployment rate to edge up to 5.1 per cent, the highest since January 2021, alongside a fall in monthly payroll numbers, reinforcing the view that the UK labour market is losing momentum.
