The figures from the Office for National Statistics (ONS) come as businesses report greater caution over hiring, with vacancies falling to 712,000 in the three months to June. The data provide a snapshot of the challenges facing the UK economy as the government seeks to improve living standards and increase employment opportunities.
Vacancy Levels Continue to Decline as Businesses Limit Recruitment
According to the ONS, the number of vacancies fell by 7,000 in the April to June period, following a decrease of 19,000 in the previous quarter. The decline was mainly driven by smaller businesses, which recorded an 8,000 fall in available roles.
Liz McKeown, ONS director of economic statistics, said the figures showed a “relatively steady labour market picture overall”, although some measures continued to indicate a softer employment environment. She added that smaller companies had cited labour and operating costs as factors affecting decisions to recruit new staff.
Separate HM Revenue and Customs payroll data showed that the number of employees on company payrolls decreased by 85,000 between May 2025 and May 2026, a fall of 0.3%. Monthly payroll numbers were broadly unchanged, with an increase of only 3,000 between April and May.
The vacancy figures remain well below the levels recorded in 2022, when demand for workers was significantly higher. The latest decline suggests that employers have become more cautious about expanding their workforce.
Wage Growth Slows as Government Faces Employment Challenge
The ONS figures also showed changes in wage growth. Private sector pay growth fell below 3% for the first time since 2020, while overall regular wage growth remained at 3.4% in the three months to May. When adjusted for inflation using the Consumer Prices Index, earnings were up by 0.4%.
According to the ONS, the employment rate for working-age adults stood at 75.1%, down 0.1 percentage points compared with a year earlier, although it increased by the same amount over the latest quarter.
The unemployment rate has increased from its low point of 3.6% in summer 2022, with the latest figure showing a labour market that has weakened over a longer period. Economists have highlighted concerns about the impact of rising business costs and uncertainty on recruitment decisions.
Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales, said the figures reflected a fragile labour market, with higher employment costs and economic uncertainty affecting hiring plans.
The government said the figures showed that too many young people remained outside employment. A spokesperson said the government wanted to create more opportunities for young people, reform education pathways and provide support for people seeking work. The latest employment figures arrive as policymakers continue to monitor wage pressures, hiring trends and economic conditions. The Bank of England is expected to consider the latest labour market data ahead of its next interest rate decision.
