UK Job Market Faces Prolonged Chill: Vacancies Plummet to Pandemic Lows
The UK job market is experiencing a significant slowdown, with the number of advertised vacancies falling to levels not seen since January 2021. Recent data reveals a concerning trend of declining opportunities, particularly for young people and those seeking entry-level positions.
Vacancy Decline: A Deep Dive into the Numbers
January saw a 3% drop in job adverts, bringing the total to 695,000, according to job search engine Adzuna. This marks the fifth consecutive month of decline and represents a 16% decrease year-on-year. Graduate jobs have been particularly hard hit, falling below 10,000 for the first time since Adzuna began tracking this data in 2016. The overall fall since mid-2025 is nearly 20%.
Rising Unemployment and Wage Growth Disconnect
This downturn in vacancies coincides with a rise in unemployment, which has reached a five-year high of 5.2%. Concerns are growing that young people are disproportionately affected, with unemployment among 18- to 24-year-olds climbing to 14% in the final quarter of 2025. Despite these challenges, average advertised salaries continue to rise, reaching £43,289 in January – a nearly 6% annual increase that outpaces inflation, which fell to 3% last month.
The Impact of Economic Factors and Automation
Several factors are contributing to this challenging landscape. Increases in national insurance contributions and the minimum wage, announced in recent budgets, have increased the cost of labour for businesses. Simultaneously, companies are increasingly prioritizing investment in automation and artificial intelligence tools over new hires. This shift is reshaping the demand for skills and creating a more competitive job market.
Regional Variations: London Feels the Pinch
Even as the decline in vacancies is widespread across the UK, London has experienced the sharpest monthly drop, with advertised roles falling by almost 6% in January. This suggests that certain regions are more vulnerable to the current economic headwinds.
Increased Competition for Available Roles
The shrinking pool of vacancies has led to increased competition among jobseekers. Currently, there are 2.4 jobseekers for each vacancy, up from 2.27 in December, highlighting the growing difficulty of securing employment.
In-Demand Roles: Where Opportunities Still Exist
Despite the overall decline, certain roles remain in high demand. The most searched-for jobs currently include warehouse staff, healthcare support workers, lorry drivers, labourers and kitchen assistants. These positions often represent essential services or sectors experiencing ongoing labor shortages.
Andrew Hunter, a co-founder of Adzuna, noted that while competition remains high, businesses are adapting and investing in areas where skills are critical.
Frequently Asked Questions
What is driving the decline in job vacancies?
Several factors are at play, including increases in labour costs, economic uncertainty, and a growing trend towards automation and AI investment.
Are all sectors affected equally?
No. While the decline is widespread, some sectors, like healthcare and logistics, continue to experience relatively high demand for workers.
What can jobseekers do to improve their chances?
Focus on developing in-demand skills, networking, and tailoring applications to specific job requirements. Consider roles in sectors with ongoing labor shortages.
Is wage growth a positive sign?
Yes, rising wages indicate that employers are still willing to pay for skilled workers. Although, this benefit is offset by the reduced number of available positions.
Pro Tip: Regularly update your CV and online profiles to reflect your latest skills and experience. Utilize job boards and networking platforms to stay informed about new opportunities.
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