UK companies are refraining from hiring or replacing departing employees, leading to a significant decrease in job vacancies, according to official figures. Between March and May, the number of available jobs dropped by 63,000, while the unemployment rate slightly rose. Liz McKeown, the director of economic statistics at the Office for National Statistics (ONS), noted a noticeable decline in the number of people on payrolls, indicating a weakening labour market. In April, National Insurance Contributions paid by employers increased, coinciding with a rise in the minimum wage.

The estimated number of available jobs decreased to 736,000 over the three months to May. McKeown mentioned that feedback from their vacancies survey suggests that some companies are hesitant to recruit new employees or fill positions when individuals leave. The data also revealed a rise in the unemployment rate from 4.5% to 4.6%, the highest in nearly four years, with predictions of further increases by Yael Selfin, the chief economist at KPMG UK. Selfin anticipates that businesses will likely reduce headcount and slow down hiring to manage the rise in employment costs, resulting in a gradual increase in the unemployment rate over the next year. The growth in average wages decelerated to 5.2% between February and April, down from a 5.6% surge. Nevertheless, it remains higher than the inflation rate, which climbed to 3.5% for the year ending in April.