Graduate roles and hiring activity decline amid economic uncertainty
Britain’s labour market continues to show signs of cooling, with new data pointing to subdued pay increases and declining job vacancies, particularly for graduate-level positions. Surveys released Wednesday highlight cautious employer behaviour in the face of ongoing economic headwinds.
According to data firm Brightmine, the majority of private sector pay settlements held steady at 3% in the three months to May. This figure lags behind the latest inflation reading of 3.4%, meaning most workers saw a real-terms pay cut. Nearly 15% of firms offered even smaller raises of just 2.5%.
“Private sector employers are holding steady at 3%, taking a more cautious approach as they wait for firmer economic signals,” said Sheila Attwood, Brightmine’s data lead.
Job Vacancies Slide, Graduate Posts Hit Hardest
Recruitment platform Indeed reported a 5% drop in job vacancies between late March and mid-June. Openings are now 21% below their pre-pandemic levels, making the UK the only major economy tracked by the platform where vacancies remain lower than before COVID-19.
The sharpest declines were seen in graduate-level roles, with sectors like human resources, accountancy, and marketing particularly affected. These roles, often sensitive to economic cycles, may also be seeing disruption from the growing use of artificial intelligence in administrative and analytical tasks.
Sector Breakdown: Retail and Hospitality in Decline
Indeed’s data also showed falling demand across customer-facing industries. Retail job postings have slipped 2% since April, food service roles are down 10%, and hospitality and tourism jobs have declined 11% over the same period.
The softening labour market comes despite warnings from employers about the added strain from higher social security contributions introduced in April by Chancellor Rachel Reeves.
Bank of England Eyes Pay Growth in Rate Decisions
The Bank of England is monitoring wage trends closely as it weighs the timing of future interest rate cuts. On Tuesday, Governor Andrew Bailey cited slowing pay growth as a potential sign that inflationary pressures may be easing.
Although job market conditions are cooling, analysts note that the UK is not facing a severe downturn. Rather, the data reflect a steady loss of momentum as employers scale back hiring plans and salary increases amid broader economic uncertainty.