Responding to the latest UK labour market figures, released by the Office for National Statistics today (Tuesday 15 September 2026), Suren Thiru, ICAEW Chief Economist, said:
“The UK labour market remains locked in a low-hire, low-fire funk, as sky-high labour costs, the continued fallout from US-Iran tensions and domestic policy uncertainty encourage firms to tread more cautiously on hiring and pay.
“Weak wage growth suggests that elevated employment costs and softer hiring demand are holding back pay rises, intensifying cost of living pressures, particularly as inflation is set to continue edging higher.
“The ongoing drop in vacancies should set alarm bells ringing for the jobs market, as it suggests that demand for workers is wilting under the weight of soaring staffing costs, onerous regulation and increased automation.
“The UK labour market could be heading for a rockier autumn, as rising energy bills and pre-Budget tax uncertainty increasingly curb hiring intentions, resulting in moderately higher unemployment and lower pay growth.
“With growth holding up and inflation rising, a cooling jobs market is currently the last line of defence against a rate hike, as these figures offer hope that softer hiring and pay growth can limit the inflationary fallout from US-Iran hostilities.”
ENDS
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