UK job vacancies fell by almost a fifth in June in a sign that economic growth had yet to “filter through to hiring”, according to new research.
Despite the UK economy recording a bump in growth through May, the performance had failed to translate to new jobs as vacancies slowed by 0.2 per cent over the month, the latest UK Job Market Report from Adzuna revealed.
Meanwhile, the number of job seekers has continued to rise, with 1.95 people looking for every job vacancy, up from 1.91 in May and the highest figure in three years.
“The positive economic growth that has been recorded in the first two quarters of the year has yet to filter through to hiring,” Andrew Hunter, co-founder of Adzuna, said.
“Whilst businesses may have put their hiring plans on pause because of the General Election, compared to the same time last year, hiring is down nearly a fifth across the UK. This is a clear sign that the job sector has still not fully recovered from the Covid-19 pandemic.”
The news comes as the Bank of England considers whether to cut interest rates at its Monetary Policy Committee meeting later this week, as it deals with conflicting data on the state of the labour market.
Office for National Statistics figures revealed earlier this month that wage growth had finally begun to ease, falling in line with expectations of 5.7 per cent growth over the quarter, the first time in nearly two years that wage growth has been below six per cent.
However, with inflation finally reaching the Bank of England’s target, in real terms, wage growth is actually at its highest rate in over two and a half years.
Adzuna’s survey did reveal “green shoots on the horizon” as professional services firms and the creative sector step up hiring and the IT sector returns to growth for the first time since 2023, Hunter added.
“Hiring traditionally falls in the summer months as companies pause recruitment for holidays, so we may need to wait until September until job hunters see the benefits from economic growth translate into more job opportunities,” he said.
Average advertised salaries did tick up slightly in June to £38,843, up 0.2 per cent from May and 2.7 per cent from the year before, but Adzuna reported it was becoming increasingly difficult to track salaries as employers continue to shun salary transparency.
Less than half of job adverts feature salary information at 47.7 per cent, down from 49.5 per cent in May and the lowest recorded figure since it began tracking the metric in 2016.
London saw one of the smallest changes in annual salary of any UK region, with wages only going up 1.5 per cent last year, beating out South East England with 1.4 per cent, Northern Ireland at 1.3 per cent and Wales at 0.7 per cent.
The East Midlands was the fastest-growing region for salaries, with wages jumping 5.5 per cent from last year to an average salary of £36,195. London’s average salary in June was £44,867.
Cambridge remains the top city for job hunters, with the lowest ratio of seeking to job vacancies at 0.35, while Guildford comes second with 0.52 and Exeter third at 0.64.
Looking by sector, companies in professional services stepped up hiring in June, with the legal sector growing 8.5 per cent, the highest of any industry. The biggest declines by industry came from admin, with a five per cent fall, healthcare at 4.2 per cent, and travel, which registered a drop of 3.2 per cent.