UK Jobs Market Cools as Vacancies Fall to 691,000

The UK jobs market is cooling, with vacancies falling to 691,000 and hiring slowing across the country. Official figures show unemployment at 4.7 percent, while employers are taking on fewer new staff.

The Office for National Statistics (ONS) said vacancies fell by 21,000 to 691,000 in the three months to September 2026. Outside the pandemic, that is the lowest number since July to September 2014.

Vacancies fall to 691,000

The ONS figures, published on 20 October, cover June to August 2026. Unemployment stood at 4.7 percent, down 0.1 points on the quarter and on the year. The employment rate for people aged 16 to 64 was 75.3 percent.

Regular pay rose by 3.7 percent over the year. But the number of payrolled employees fell by 66,000 over the year to September, to an early estimate of 30.3 million. The Claimant Count, which tracks people claiming out-of-work benefits, rose to an estimated 1.701 million in September.

The ONS said the fall in vacancies was mainly due to smaller firms, which are struggling with higher labour costs. Vacancies have now fallen in most sectors, and the drop was the biggest since the three months to March.

Hiring slows, but few layoffs

A separate survey by KPMG and the Recruitment and Employment Confederation (REC), published on 9 November, found that permanent placements fell in October for the first time in four months. Temporary billings also fell, for the first time since March.

At the same time, the number of people looking for work rose sharply, driven by redundancies. That means competition for each vacancy is up.

Demand for permanent staff still rose in six of ten sectors, led by IT and computing and by engineering. Retail and hotel and catering fell the most.

Bank of England Deputy Governor Clare Lombardelli said in a speech on 10 November that the labour market is cooling mainly because employers are hiring fewer people, rather than making staff redundant. She said: “The labour market is stuck in low gear.” Vacancies across the economy are around 14 percent below pre-pandemic levels, and 46 percent lower in retail. The redundancy rate, by contrast, is roughly in line with its pre-pandemic level.

Young workers hit hardest

Unemployment among 16 to 24-year-olds is more than three times the overall rate. This age group accounts for more than half of the rise in unemployment since mid-2022.

For young people looking for their first job, the market is tougher than it has been for years. Fewer vacancies and more competition mean applications need to stand out. Tailoring a CV to each role, showing real skills, and applying early can help.

The Bank of England raised interest rates to 4 percent last week, as reported in Bank of England Raises Interest Rates to 4% in First Hike Since 2023. Higher rates can slow hiring further, as firms face higher borrowing costs.

What to watch next

The next ONS labour market release is due on Tuesday 17 November 2026. It will show whether vacancies kept falling and whether unemployment moved. The Budget, due in the coming days, may also bring changes that affect hiring, as firms watch for new tax or wage measures.

For job seekers, the picture is mixed. IT, computing and engineering are still hiring, and demand for permanent staff rose in most sectors. But overall, the market is flat, and the competition for each role is growing. Those who can show the skills employers want — especially in technology and engineering — will have the best chance.

Read more of our Jobs & Careers coverage.

Sources: Kandiq, ABC Money, Breckman & Company.