“The UK labour market remains stuck in a low-churn limbo, with employers reluctant to hire, fire or offer bigger pay rises as they grapple with rising costs, intensifying global headwinds and heightened policy uncertainty.
"Cooling private sector wage growth is a double-edged sword for the economy, reducing the risk of interest rate rises by limiting inflationary spillovers from the Iran war-induced energy shock, but also signalling a deepening cost of living squeeze.
"The persistent slide in vacancies is a red flag for the jobs market, suggesting labour demand is shrinking amid soaring employment and energy costs, while greater automation is also squeezing some entry-level roles.
"The UK jobs market is likely in for a rougher ride in the months ahead, as rising energy costs and growing speculation over tax rises ahead of the October Budget dampen employers' appetite to hire, pushing unemployment modestly higher.
"These figures reduce the likelihood of a September interest rate rise, raising hopes that labour market conditions will help rather than hinder the fight against inflation by restraining pay growth and dampening demand across the economy."
ENDS
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* includes parent companies. Source: ICAEW member data March 2026, Interbrand, Best Global Brands 2025.
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