News Story

Job vacancies have fallen to a fresh five-year low as small firms continue to hold back from hiring amid soaring wage costs, according to official figures.

The Office for National Statistics (ONS) said there were around 8,000 fewer vacancies quarter on quarter in the three months to August, at 702,000, which remains the lowest since spring 2021, or, outside the Covid pandemic years, for over a decade.

Small firms are flagging ongoing pressures from rising wage bills as a factor holding them back from taking on staff, according to the ONS.

The data showed regular average weekly earnings growth remained unchanged at 3.5% in the three months to July, while it continues to outstrip inflation, rising by 0.8% with the Consumer Prices Index taken into account.

The UK unemployment rate also remained unchanged at 4.9% in the three months to July, but more timely data estimates that workers on payrolls slumped by 26,000 during August to 30.2 million, following a 19,000 drop in July, though the latest figures are subject to revision.

Liz McKeown, ONS director of economic statistics, said: “Payrolled employee numbers continue to edge down, with falls over the past year particularly evident in the retail and hospitality sectors.

“Vacancies remain at their lowest level outside the pandemic period for more than a decade, with smaller businesses continuing to report that increased labour costs are affecting hiring decisions.”