For the first three months of 2025, the estimated number of vacancies fell by 26,000 to 781,000, according to the Office for National Statistics (ONS).
The drop marked the 33rd quarter in a row the number of vacancies fell, and was the first time since 2021 that the job market was weaker than pre-pandemic levels.
However, the employment rate for those aged between 16 and 64 years old rose to 75.1% between December 2024 and February 2025. Payrolled employee numbers dipped by 8,000 between January and February 2025 but grew by 35,000 in the 12 months up to February 2025.
The unemployment rate for the same age group was estimated by the ONS to be 4.4%, similar to the level in the previous quarter.
While the number of job roles available in the UK fell, so did the economic inactivity rate, which measures how many people are unable to work or not seeking employment. The rate for those in that position fell to 21.4% for Brits aged 64 years and below.
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Last month, the growth in employees’ wages remained stable, rising by 5.9% – excluding bonuses – in the three months to January 2025, and this trend continued at the same level up to February this year.
The falling job vacancies have been attributed to the 15% National Insurance contribution (NIC) rise for employers, which is not to be implemented until April 2026.
Other factors include the increase in the National Living Wage to £13.85 per hour, adding a financial burden to businesses, according to Resolution Foundation.
‘Picture of stalling jobs and real pay’
Louise Murphy, senior economist at Resolution Foundation, said: “The last snapshot of the labour market before the Government’s Minimum Wage and employer National Insurance contributions uplift reveals a picture of stalling jobs and real pay. This sluggishness in jobs is nothing new, as we have just marked two years of a falling employment rate.
“The continued jobs slowdown, and stalling pay, add to the headwinds for living standards in the face of rising taxes and bills.”
Meanwhile, Jane Gratton, deputy director of public policy at the British Chambers of Commerce (BCC), said: “The labour market continues to be a significant pressure bearing down on businesses of all sizes.
“The rising cost of employment is a major challenge for employers. While wage growth, including bonuses, has eased once again, it continues to significantly outpace inflation.
“Added to this, the employer National Insurance hike this month has ramped up staffing costs. It will be some time before we will fully understand the true impact of these increases on jobs, investment, and the extent to which firms can absorb and adjust to the rising costs.”
Gratton added: “The Government must ease the cost pressures on businesses, so they have the freedom to recruit and invest in a skilled workforce. The recent announcement on construction training investment by the Chancellor was welcome.
“However more flexibility in the skills system is needed to boost training and development across the economy.
“The Employment Rights Bill continues to concern business. While Government is consulting business, the legislation as it stands threatens to add even more costs and complexities for employers.”
