UK firms hold off on hiring as job vacancies fall

In light of recent official figures, it appears that UK companies are hesitant to hire new employees or fill vacancies left by departing workers, resulting in a significant decline in job opportunities. The statistics reveal a decrease of 63,000 available jobs between March and May, coinciding with a rise in the unemployment rate.

Liz McKeown, director of economic statistics at the Office for National Statistics (ONS), noted the weakening labor market trend, emphasizing a noticeable decline in the number of individuals on payrolls. The estimated number of available jobs dwindled to 736,000 over the three months leading up to May, indicating a potential reluctance among firms to bring on new staff.

Yael Selfin, chief economist at KPMG UK, expressed concerns that the unemployment rate, which has reached 4.6%, the highest in almost four years, could continue to climb. With the rise in employment costs due to increases in National Insurance Contributions and minimum wage, businesses may resort to reducing headcounts and slowing their hiring activities to offset the financial impact.

Despite the unemployment rate ticking higher, Chancellor Rachel Reeves defended the government’s decision to raise National Insurance contributions by employers, predicting a revenue boost of £25bn by the end of the parliament. The upcoming Spending Review led by Reeves aims to allocate funds for essential public services and infrastructure investments, with an emphasis on sectors like the NHS and defense

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