UK Job Vacancies Drop 21,000 to 691,000 as Small Firms Cut Hiring

Published on 10/20/2026 · Source: bbc.co.uk

AI Summary

Summarized by AI from the source below

UK job vacancies decreased by 21,000 in the three months to September, falling to 691,000, the lowest level in over five years, according to the Office for National Statistics (ONS). The decline is mainly due to smaller businesses reducing recruitment, citing increased labour costs such as rising energy expenses, National Insurance contributions, and minimum wage hikes. The largest drop in vacancies occurred in the construction sector.

The unemployment rate in the UK fell to 4.7% in the three months to August, the lowest in more than a year. Average earnings excluding bonuses rose by 3.7% over the three months to August. Adjusted for inflation, wages increased by 0.8% in real terms. The employment rate edged up slightly, although payroll numbers remained slightly down, with some recent data suggesting that the decline may be leveling off. For young people aged 16 to 24, the unemployment rate was 15.6% in June to August, a decrease from the previous quarter but higher than the same period last year.

These figures represent the last official labour market update before Chancellor John Healey's upcoming Budget. The data highlight ongoing challenges for small businesses facing higher costs and the need to address youth unemployment. The trends reflect subdued hiring despite improvements in some employment metrics, which may influence government policies related to labour and economic support.

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Our take

Opinion from the Newsstocks AI desk, not investment advice

We think the UK labour market shows mixed signals: while unemployment has decreased, vacancy levels have dropped and hiring is subdued, especially among small firms. Rising costs are pressuring businesses to limit recruitment, which may restrain economic growth. Future data post-Budget will be important to assess government impact on these trends.

Key numbers

Job vacancies: 691,000
Vacancy decline: 21,000
Unemployment rate: 4.7%
Average earnings growth: 3.7%

What could help

Unemployment rate fell to its lowest in over a year, suggesting some labour market recovery.

What could hurt

Small firms are reducing hiring due to rising labour and energy costs, especially in construction.

What to watch next

Chancellor John Healey will present his first Budget next week.

The background

Job vacancies indicate the number of open positions companies want to fill. Changes in vacancies reveal labour market strength and hiring trends.

Questions readers ask

Why did UK job vacancies fall according to the Office for National Statistics?

Job vacancies fell by 21,000 largely because smaller businesses cited labour costs, including higher energy expenses and increased National Insurance and minimum wage, as key reasons for reducing hiring.

What is the current unemployment rate in the UK?

The unemployment rate fell to 4.7% in the three months to August, the lowest in more than a year.

What is the youth unemployment situation in the UK?

Youth unemployment for those aged 16 to 24 was 15.6% in the June to August quarter, down from the previous quarter but higher than the same period last year.