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UK employers cut job vacancies as Burnham aims to lift living standards
UK employers reduced the number of job vacancies in the three months to May, according to official figures, as the labour market showed further signs of strain amid global instability including conflict in the Middle East. Unemployment held steady at 4.9%, unchanged from April, underscoring the difficult economic backdrop facing new prime minister Andy Burnham as he pushes a 10-year plan to raise living standards across the country.
Vacancies fell to 712,000, roughly half the level recorded in 2022, while private sector earnings growth slowed to 2.9%, leaving overall average pay growth, including bonuses, at 4.3% – below economists' forecast of 4.5%. Analysts had also expected unemployment to rise to 5%. ICAEW chief economist Suren Thiru warned the figures point to a "fragile" labour market, with high employment taxes, regulation and uncertainty curbing hiring, and cautioned unemployment could edge higher over the summer. The weaker pay growth is expected to ease pressure on the Bank of England over interest rates.
In short
- UK job vacancies fell to 712,000, about half of 2022's level
- Unemployment steady at 4.9%, below forecasts of 5%
- Weak pay growth eases pressure on Bank of England rate policy
Explained simply
Job vacancies are the number of unfilled positions that employers are actively trying to fill. They matter because they show how many job opportunities are available to workers: when vacancies are high, workers have more choices, but when they fall, jobs become harder to find. The UK's vacancy numbers have been declining significantly from the very high levels seen in 2022 and 2023.
Andy Burnham is the UK's new prime minister. His government has made improving living standards for workers a central goal, with plans to raise wages and economic security over the coming years.
The weakening job market and slowing pay growth matter because they directly affect people's ability to earn a decent living and improve their financial security. Global economic instability, including tensions in the Middle East, has combined with domestic challenges to create uncertainty for businesses and workers. How the government responds to these pressures will be crucial to whether Burnham's ambition to lift living standards can be realised.
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