UK jobs market 'faces more pain' as firms reduce hiring

Employers have cut annual pay increases and pared back hiring in recent months as the economic slowdown took its toll on the jobs market.

- Phillip Inman Lauren Almeida

Data from the Office for National Statistics released yesterday showed that UK unemployment edged higher in the three months to June but the official jobless rate was unchanged at 4.7%, a four-year high.

Pay growth including bonuses dropped from 5% to 4.6% over the same period. However, stripping out one-off awards, pay growth remained at 5%, suggesting employers had cut back on incentives.

Giving a strong indication of employers' reluctance to recruit new staff, the vacancy rate fell by 44,000. The drop of more than 5% in the three months to June on the previous quarter was the 37th consecutive fall in vacancies and took the total to well below pre-pandemic levels at 718,000.

The ONS said its research "suggests some firms may not be recruiting new workers or replacing workers who have left".