The number of advertised job vacancies in the United Kingdom has dropped below 700,000 for the first time since early 2021, marking a return to levels last seen during the Covid pandemic. At the same time, unemployment has climbed to 5.2 per cent, underscoring mounting pressure in the labour market.
New figures suggest that hiring activity has weakened steadily in recent months, with competition for available roles intensifying. The data paints a subdued picture of the jobs market at the start of 2026, particularly for young people and graduates entering the workforce.
According to research from job search platform Adzuna, vacancies fell by 3 per cent in January to 695,000, representing the first dip below the 700,000 threshold since January 2021. The decline continues a downward trend observed throughout the latter half of 2025.
Vacancies Decline Sharply as Competition Intensifies
The contraction in hiring has been pronounced over the past year. Adzuna’s figures show that advertised roles were down 16 per cent compared with January 2025 and have fallen by nearly 20 per cent over the past six months. The platform describes this as a sharp reduction in opportunities since mid-2025.
Competition for each position has increased accordingly. According to Adzuna, there are now 2.4 jobseekers for every vacancy, up from 2.27 in December. More than two candidates are vying for each available role, reflecting tighter conditions for applicants across much of the country.
The decline has been widespread geographically, though London recorded the steepest monthly fall, with advertised roles dropping by almost 6 per cent in January. Graduate positions have been particularly affected, falling below 10,000 for the first time since Adzuna began tracking the data in 2016.
Official data from the Office for National Statistics shows unemployment has risen to 5.2 per cent, the highest level in several years. Among 18- to 24-year-olds, unemployment reached 14 per cent in the final three months of 2025, highlighting the challenges facing younger jobseekers.
Rising Labour Costs and Automation Reshape Hiring Landscape
Several factors have been linked to the slowdown in recruitment. According to the reports, employers are facing increased national insurance contributions and a higher National Living Wage, measures introduced in recent budgets by Chancellor Rachel Reeves. Business leaders cited in the coverage have argued that these changes have weighed on confidence and hiring decisions.
Adzuna attributes the downturn to a combination of elevated living costs, higher employer national insurance contributions and the growing adoption of artificial intelligence tools in workplaces. Some companies are prioritising investment in automation rather than expanding their workforce.
Despite the fall in vacancies, wage growth has provided a measure of resilience. Average advertised salaries rose to £43,289 in January, marking an annual increase of almost 6 per cent and outpacing inflation, which stood at 3 per cent last month. Andrew Hunter, co-founder of Adzuna, said that while competition remains high, employers are still willing to pay for the right skills.
The most searched-for roles in January included healthcare support workers, warehouse staff, lorry drivers, labourers and kitchen assistants. Hiring may be approaching pandemic-era levels, as Hunter noted, but wage growth and pockets of sectoral demand suggest that parts of the labour market remain active even as overall opportunities contract.
