New job adverts fell for the second month in a row in November, adding to signs that demand for workers is cooling as businesses grapple with budget uncertainty and proposed changes to employment law.
According to the latest survey from the Recruitment and Employment Confederation (REC), new job postings dropped by 14.4 per cent between October and November, while the total number of active job adverts fell by 11.2 per cent over the same period.
The slowdown is notable given that hiring typically accelerates in sectors such as retail and hospitality in the run-up to Christmas. The REC said the decline suggests many employers chose to pause recruitment ahead of the Chancellor’s budget on November 26, while also waiting for clarity on the government’s Employment Rights Bill.
Although the bill was softened towards the end of the month, it remains stalled in the House of Lords, where peers have called for a cap on compensation payouts in unfair dismissal cases, a point of concern for many employers.
Neil Carberry, chief executive of the REC, said that while the budget had unsettled businesses, the eventual outcome was less damaging than many had feared.
“While the budget was by no means an easy listen for companies, the overall picture was more benign for most sectors than feared,” he said. “We can hope that this, along with the more pragmatic tone the government has struck on the Employment Rights Bill over the past month, will help get the hiring market moving again.”
The fall in vacancies is the latest indication that budget speculation has weighed on economic confidence. Official figures released last month showed the economy unexpectedly contracted by 0.1 per cent in October, with the Office for National Statistics noting that uncertainty around fiscal policy had dented confidence, hiring plans and investment decisions.
Despite the recent slowdown, the REC stressed that overall vacancies remain at historically healthy levels, with around 1.46 million roles available across the economy. Some sectors even recorded month-on-month gains, including adverts for theme park attendants, stock control assistants and public relations directors.
However, retail and hospitality, two sectors already under pressure from rising costs, saw sharp falls in active job postings, down 14.1 per cent and 10.4 per cent respectively. Both industries have been among the hardest hit by the increase in employers’ national insurance contributions introduced in April.
More broadly, the number of job vacancies has been on a downward trajectory for around two years as the post-pandemic labour market gradually cools. The Bank of England closely monitors vacancy data, particularly the ratio of unemployed people to available jobs, as part of its assessment of inflationary pressure and labour market tightness.
That ratio has risen steadily, from 1.8 unemployed people per vacancy last year to 2.5 by July, signalling a loosening jobs market. Job listings are widely viewed as a forward-looking indicator, reflecting employers’ confidence in future demand.
Attention will now turn to the latest official employment and wage growth figures, due to be published on Tuesday, covering the three months to October. The data will be closely watched by the Bank of England’s monetary policy committee ahead of its interest rate decision later in the week.
Economists expect the unemployment rate to edge up from 5 per cent to 5.1 per cent, the highest level since January 2021, alongside a fall in monthly payroll numbers, reinforcing the view that the UK jobs market is continuing to lose momentum.