Vacancies back to pre-pandemic levels as UK jobs market slows
The number of vacancies in the UK economy has fallen back in line with pre-pandemic levels, according to new figures from the Recruitment and Employment Confederation (REC).
Data from the business group shows that there were 1.44m active job postings in December, only slightly more than the 1.41m open roles recorded five years ago.
The survey showed that there was a 5.5 per cent decrease in the number of job openings compared to November while the number of new job postings fell by nearly 17 per cent.
Neil Carberry, chief executive of the REC, said this was partly due to seasonal factors.
“December is always a recruitment low point,” he noted. But the figures point to the prolonged slowdown in the labour market over the past couple of years.
Demand for workers surged in the aftermath of the pandemic, with the number of vacancies exceeding the number of people looking for work for much of 2022.
Since then the number of vacancies has steadily been declining. The latest figures from the Office for National Statistics (ONS) showed that the number of vacancies has decreased for 29 consecutive rolling quarters.
“The UK has just experienced its longest jobs market contraction since 2000,” Carberry said.
What this means for the wider UK economy
A looser labour market should enable the Bank of England to cut interest rates further in the coming year, because workers will receive smaller pay-packets, easing the burden on firms.
But economists are concerned that the government’s maiden Budget will pile further pressure on the jobs market, with multiple surveys pointing to a slowdown in hiring since October.
Recent research from Deutsche Bank suggested that around 100,000 jobs could be lost as a result of the national insurance hike.
Carberry argued that government policy feels like “more of a hindrance than a help” to the jobs market but still suggested it had the potential to recover in 2025.
“We anticipate that a return to growth this year will drive business confidence to hire and invest. Firms will be looking to the Chancellor to underpin this confidence in her interventions later in the month,” he said.