New data suggests that Britain’s labour market has deteriorated sharply, with job vacancies plunging to 694,000, a five-year low not witnessed since the depths of the pandemic.
Unemployment has simultaneously climbed to 5.2 per cent, marking the highest rate recorded in four years, according to the latest figures from the Office for National Statistics (ONS).
The squeeze on opportunities means jobseekers now face significantly tougher competition, with more than two candidates chasing every available position, with some businesses taking aim at Chancellor Rachel Reeves’s tax decisions.
Research from jobs platform Adzuna revealed that advertised roles dipped below the 700,000 threshold for the first time since January 2021. Last year, the Chancellor raised the National Living Wage for workers and employer National Insurance contributions.
Job vacancies have fallen once again
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The figures paint a troubling picture of the employment landscape, with experts pointing to a dramatic contraction in hiring activity throughout the latter half of 2025.
Adzuna’s data showed vacancies contracted by three per cent over the past month alone, extending a persistent downward trajectory observed throughout late last year.
Compared with the same period last year, available positions have shrunk by 16 per cent, while the six-month decline stands at a stark 19 per cent.
The jobs platform attributed the sharp reduction in opportunities to several converging pressures, including elevated living costs, higher National Onsurance contributions for employers, and the growing adoption of artificial intelligence in workplaces.
UK posts record £30.4billion January surplus as tax receipts beat forecasts | GETTY
The Chancellor is under fire over her tax decisions
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GETTYThose searching for work have gravitated towards roles including healthcare support positions, warehouse operatives, HGV drivers, general labourers and kitchen staff.
Critics have placed responsibility for the deteriorating jobs market squarely at the Government’s door.
David Belle, founder and trader at Fink Money, said he entirely blames Labour for the rise in unemployment, arguing the economy “was actually doing quite well before they were elected”.
He added: “July 2024 is when we started seeing a complete collapse in business confidence. It’s also when we started seeing the inflation uptick and vacancies plummet.”
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Speaking to Newspage, Mike Staton, director at Mansfield-based Staton Mortgages, described the situation as “economic neglect, saying: “Under Rachel Reeves and Keir Starmer, we’ve got rising unemployment, falling vacancies, and wages cooling fast and they’re claiming it all as a victory in the name of progress.”
Mr Staton accused the Labour Government of “taxing confidence out of” the economy while businesses freeze recruitment and young people bear the brunt.
Andrew Hunter, the co-founder of Adzuna, warned that despite official ONS data suggesting hiring rates may be levelling off, the reality on the ground tells a starkly different story.
He said: “Our January figures show hiring is approaching pandemic-era levels, and with graduate roles falling to a record low, this suggests the market is far from being on stable footing yet.”