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Key Points

The UK job market shows persistent weakness with unemployment climbing to 4.7%, the highest level in four years. Job vacancies have now fallen for 36 consecutive quarters as firms grapple with rising labour costs and economic uncertainty. Business leaders warn that financial pressures and skills shortages continue to hamper recruitment and productivity. Many companies are turning to temporary workers for flexibility amid cautious hiring practices.

Key Points: UK Job Market Slump Continues as Unemployment Hits 4-Year High

  • UK unemployment hits 4.7%, highest in four years
  • Job vacancies drop for 36th straight quarter
  • Firms cite labour costs as top hiring barrier
  • Temporary work rises as businesses seek flexibility
2 min read

Britain's job market remains sluggish: National Statistics data

UK unemployment rises to 4.7% with falling vacancies as firms face labour costs and hiring hesitancy, per ONS data.

"The mounting financial pressure, alongside pervasive skills shortages, remains a massive challenge for business – Jane Gratton, British Chambers of Commerce"

London, July 17

Britain's job market continued to see recession, with unemployment rate and job vacancies rising to new highs over years due to labour cost hikes, data from the Office for National Statistics (ONS) showed Thursday.

The country's unemployment rate for people aged 16 years and over stood at 4.7 per cent in the March-May period of 2025, registering increase both year on year and quarter by quarter, according to the ONS. The figure also reached the highest level in around four years.

From March to May, the number of payrolled employees fell 0.3 per cent year on year and was 0.2 per cent lower from the previous quarter.

During the April-June period, The number of job vacancies fell 56,000 to 727,000, marking the 36th consecutive period where vacancy numbers have dropped compared with the previous quarter, the data showed, Xinhua news agency reported.

The ONS data suggests that the jobs market is continuing to loosen as unemployment rises, vacancies fall again, and wage growth slows, said Jane Gratton, Deputy Director of Public Policy at the British Chambers of Commerce. She also noted that pay rises are still outpacing inflation, and employment costs pressure is continuing to erode firms' operating margins.

The ONS said some firms may not be recruiting new workers, or replacing workers who have left based on the feedback of its survey. Analysts argued that April's rise in employer national insurance contributions (NICs) has discouraged firms from hiring.

The weakening trend of employment "reflects businesses' reactions to rising costs and an uncertain external environment. Many firms are choosing to operate leaner in response to the current situation -- we can see that in private sector temporary work outperforming other forms of hiring right now as firms seek flexibility," said Neil Carberry, Chief Executive of the Recruitment and Employment Confederation.

Research from British Chambers of Commerce showed that recruitment remains challenging, and businesses cite labour costs as the biggest pressure.

"The mounting financial pressure, alongside pervasive skills shortages, remains a massive challenge for business, presenting big risks to investment and productivity," said Gratton, adding that companies want to see real-world progress on the government's economic strategies, movement on global trade talks and no further tax rises to restore business confidence.

- IANS

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Reader Comments

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Sarah B
Interesting to see developed nations struggling with employment while India is creating jobs through startups and manufacturing. Our IT sector continues to hire despite global headwinds. Maybe UK companies should look at outsourcing more work to India?
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Arjun K
The UK should learn from India's flexible labor policies. Our gig economy is booming with Zomato, Swiggy, Ola creating lakhs of jobs. Sometimes western rigidity in labor laws becomes counterproductive.
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Priya S
As someone who worked in London for 3 years, I can say the high taxes there make it very difficult for businesses. In India, we have better tax incentives for startups and MSMEs. UK needs similar reforms!
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David E
While the situation is concerning, let's not forget UK still has strong social security nets. In India, job loss often means complete financial crisis for families. We need better unemployment benefits here.
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Nisha Z
Brexit consequences finally showing? Many Indian professionals are returning from UK due to visa issues and job uncertainty. Maybe it's time for UK to reconsider its immigration policies to attract global talent.
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Karthik V
The article misses mentioning how Indian companies in UK like Tata Steel, JLR are performing. They employ thousands there. Would be interesting to see their hiring trends amidst this slowdown.

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