{"id":13910,"date":"2025-06-25T07:00:00","date_gmt":"2025-06-25T06:00:00","guid":{"rendered":"https:\/\/www.hiringlab.org\/uk\/?p=13910"},"modified":"2025-07-24T20:07:54","modified_gmt":"2025-07-24T19:07:54","slug":"uk-mid-year-labour-market-update-2025-continuing-to-steadily-cool","status":"publish","type":"post","link":"https:\/\/www.hiringlab.org\/uk\/blog\/2025\/06\/25\/uk-mid-year-labour-market-update-2025-continuing-to-steadily-cool\/","title":{"rendered":"UK Mid-Year Labour Market Update 2025: Continuing to Steadily Cool"},"content":{"rendered":"\n<p><strong>Key points:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Job postings have continued to gradually decline, but haven\u2019t crashed following April\u2019s policy changes.<\/li>\n\n\n\n<li>The labour market has loosened but is still somewhat tight amid still-low job losses.<\/li>\n\n\n\n<li>Job postings for retail and hospitality positions have declined only modestly in recent months, despite gloomy predictions.<\/li>\n\n\n\n<li>Graduate jobs are scarce, with the share of grad jobs the lowest since at least 2018.<\/li>\n\n\n\n<li>The prevalence of zero-hours contracts has started to decline.\u00a0<\/li>\n\n\n\n<li>Remote\/hybrid flexibility in job postings remains close to peaks.\u00a0<\/li>\n\n\n\n<li>GenAI jobs remain a small but rapidly growing share of postings, with the UK emerging as an early leader among larger developed economies.\u00a0<\/li>\n<\/ul>\n\n\n\n<p>2025 was expected to be a challenging year for the UK labour market, and at roughly the mid-point of the year, that\u2019s largely proven to be the case. That said, the market has weathered headwinds reasonably well, including a nationwide increase in employment costs and ongoing global volatility, and has experienced only a continued gradual softening rather than a nosedive.&nbsp;<\/p>\n\n\n\n<p>Economic forecasts have generally been trimmed since the start of the year, with the UK expected to see muted growth in 2025. On the plus side, real wage growth remains positive, cushioning consumer spending, and some areas of the economy are set to see a boost through higher government expenditure.&nbsp;<\/p>\n\n\n\n<p>Monetary policy has become less restrictive in recent months as the Bank of England (BoE) has gradually <a href=\"https:\/\/www.bbc.co.uk\/news\/articles\/c98wyyk475no\" target=\"_blank\" rel=\"noreferrer noopener\">reduced interest rates<\/a>. The BoE has consistently said that the pace of rate cuts will likely remain gradual, partly because of continued strong wage growth. The extent to which a cooling labour market leads to subsiding inflation pressures remains a key focus for rate setters; a more material easing in wage growth could open the door to more aggressive interest rate cuts.\u00a0\u00a0<\/p>\n\n\n\n<p>Despite certain downbeat <a href=\"https:\/\/www.personneltoday.com\/hr\/third-of-firms-plan-more-job-cuts-after-nics-increase\/\" target=\"_blank\" rel=\"noreferrer noopener\">surveys<\/a>, job losses have remained low. But employers\u2019 hiring appetites are weak, and it\u2019s a tough market for those out of work or looking for their first job. And many organisations are <a href=\"https:\/\/www.telegraph.co.uk\/business\/2025\/06\/22\/city-giants-replace-graduate-jobs-with-ai\/\" target=\"_blank\" rel=\"noreferrer noopener\">reportedly<\/a> looking to adopt AI to help with the sorts of tasks normally assigned to entry-level workers, potentially further reducing hiring demand.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Job postings have continued to gradually decline, but haven\u2019t crashed<\/h2>\n\n\n\n<p>UK job postings have continued to fall in recent months, though the pace of decline has remained steady rather than showing any real signs of acceleration. As of 13 June, overall UK job postings were down 5% from their level at the end of Q1. They now sit 21% below their 1 February 2020, pre-pandemic baseline. The UK remains an outlier among peer economies in Europe and the US, where job postings remain above the baseline.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXfraUn37D-e-dWR8ULXKpT4AszwD7y7Y3tzb0nLi1QgbJuKeAnJg9czTixUoEIsUjZW7IlJHSlTi57gklkLfeKqW2FtVGkkaj82k1fMuNG98VLD2dacgHpkZKEJ_k8r41ADUVwc?key=2hgwcQIMAUjbf4NeEW1DgQ\" alt=\"Line chart titled \u201cUK job postings remain well below pre-pandemic levels\u201d shows the Indeed Job Postings Index for leading global economies. UK job postings are trending lower than in Australia, Canada, France, Germany and the US.\u00a0\" \/><figcaption class=\"wp-element-caption\"><em>Line chart titled \u201cUK job postings remain well below pre-pandemic levels\u201d shows the Indeed Job Postings Index for leading global economies. UK job postings are trending lower than in Australia, Canada, France, Germany and the US.\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Labour market continues to gradually loosen, but remains somewhat tight<\/h2>\n\n\n\n<p>The UK labour market has loosened further as vacancies have continued to fall and unemployment has risen modestly. The ratio of unemployed people for each vacancy has increased from 1 in 2022 to 2.2 as of April 2025, but remains below its historical average of 2.8.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXfj4zDGur2p8novfhuz3WUaSRrKFkpY2KNLZmDnNyRP4FCVbnwZqfgRr7ChKWTaIfBIgSbTJIqVo_WCsmlpKraiptgw-K-8AyzQ6YqH47X4Q6V4TvJhfgqcV6lHeVallMJaoCHAQA?key=2hgwcQIMAUjbf4NeEW1DgQ\" alt=\"Line chart titled \u201cUK labour market continues to gradually loosen\u201d shows the ratio of unemployed people to vacancies from 2001 to 2024. The ratio has risen but remains fairly low at 2.2.\u00a0\" \/><figcaption class=\"wp-element-caption\"><em>Line chart titled \u201cUK labour market continues to gradually loosen\u201d shows the ratio of unemployed people to vacancies from 2001 to 2024. The ratio has risen but remains fairly low at 2.2.\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n<p>Despite concerns that <a href=\"https:\/\/www.bbc.co.uk\/news\/explainers-63635185\" target=\"_blank\" rel=\"noreferrer noopener\">April\u2019s hike in employment costs<\/a> may have led companies to lay off staff, the number of potential redundancies notified to the government has remained low, with little sign of any uptick in recent months.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXdXB9UvxmWoRBM-Ogtm_QVwr3LfVmVj4S2RHp10VkAbwywo7bg0V264N75RFzaL3F7qvotrqRVezNmvzsTCm417qCoFQyg-ZVxkOE-HhdlZroRkz6QHk94q_XuKUPQxeWc6jH-QXA?key=2hgwcQIMAUjbf4NeEW1DgQ\" alt=\"Line chart titled \u201cRedundancy notifications remain modest\u201d shows the number of potential redundancies notified to the government from 2020 to 2025. Notifications have remained low in recent months.\u00a0\" \/><figcaption class=\"wp-element-caption\"><em>Line chart titled \u201cRedundancy notifications remain modest\u201d shows the number of potential redundancies notified to the government from 2020 to 2025. Notifications have remained low in recent months.\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Retail and hospitality have seen only modest declines<\/h2>\n\n\n\n<p>Prior to April&#8217;s rise in employment costs, there were warnings that the changes could lead to significant reductions in headcount among <a href=\"https:\/\/www.bbc.co.uk\/news\/articles\/cp816jrnynyo\" target=\"_blank\" rel=\"noreferrer noopener\">retail<\/a> and <a href=\"https:\/\/www.ft.com\/content\/1e54abab-346c-4e65-bd24-56db038233d1\" target=\"_blank\" rel=\"noreferrer noopener\">hospitality<\/a> businesses that were most exposed to the cost increases. But while occupational categories linked to those sectors have seen declines post-April, they have not been especially outsized and are similar to those seen across the overall market. Retail postings are down 2% since April, food service is down 10% and hospitality &amp; tourism is down 11%. Together, those categories account for slightly more than one-in-seven UK job postings.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXfbKyFwD6kRg6ncy-2bc47gX3_7nHCsKFpsOuDlosgOJWGr9yI7CJhN91o45eCZSvBjDt2FnWIBLGNg6a1c-BoHGSVLToAF9TzFQou7RYwEzQqZCIgYKqny4ZDFzhVOTMzDfGak0w?key=2hgwcQIMAUjbf4NeEW1DgQ\" alt=\"Line chart titled \u201cRetail and hospitality postings have seen modest declines post-April\u201d shows the UK Job Postings Index as of 13 June 2025. Job postings in retail and hospitality categories have been broadly stable in recent months.\u00a0\" \/><figcaption class=\"wp-element-caption\"><em>Line chart titled \u201cRetail and hospitality postings have seen modest declines post-April\u201d shows the UK Job Postings Index as of 13 June 2025. Job postings in retail and hospitality categories have been broadly stable in recent months.\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n<p>Job postings remain softest in occupations that traditionally offer the greatest remote-work flexibility. In addition to ongoing weakness in tech roles \u2014 the most remote-friendly sector \u2014 several professional categories, including media &amp; communications (-48% below baseline), marketing (-37%), project management and human resources (both -27%), are also underperforming the national average.<\/p>\n\n\n\n<p>However, it is the <a href=\"https:\/\/www.nursingtimes.net\/newly-registered-nurses\/new-nurses-turning-to-coffee-shop-work-amid-nhs-job-shortage-15-05-2025\/\" target=\"_blank\" rel=\"noreferrer noopener\">nursing<\/a> category where postings are furthest below baseline (-66%), followed by beauty &amp; wellness (-51%). Categories where job postings are furthest above the baseline are education &amp; instruction (+49%), social science (+48%) and real estate (+45%).\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXdXeUi0LJPoWmPGxdri5LoHHB9AffpfNfVQDg_JM_zMKZdRdnhu-P1Z4hc2LNoVpnBlyZfkjl2jY_gXOiGWN2wCSnCOz2SUZQPlg4cvMCwiHmpYgabvNbaFB1rLwwdEKEKna_Vngg?key=2hgwcQIMAUjbf4NeEW1DgQ\" alt=\"Line chart titled \u201cHigh-remote sectors continue to track weakest\u201d shows the UK Job Postings Index by remote-work tier from 1 February 2020 to 13 June 2025. Postings are trending weakest in high-remote sectors.\u00a0\" \/><figcaption class=\"wp-element-caption\"><em>Line chart titled \u201cHigh-remote sectors continue to track weakest\u201d shows the UK Job Postings Index by remote-work tier from 1 February 2020 to 13 June 2025. Postings are trending weakest in high-remote sectors.\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n<p>Reflecting their greater exposure to weakness in professional occupations, job postings in the South East and London (down 32% and 29%, respectively, from their pre-pandemic baselines) continue to underperform other regions. Northern Ireland (+19%) and the North East (+4%) are the only regions where postings remain above pre-pandemic levels.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Graduate jobs share is the lowest since at least 2018<\/h2>\n\n\n\n<p>Entry-level jobs have been hard hit. As of 13 June, graduate roles were down 12% on last year and were pacing at their weakest level since at least 2018, weaker even than their share in 2020 and 2021 when the pandemic made it difficult for employers to assimilate new joiners. The <a href=\"https:\/\/www.ft.com\/content\/cd134613-367c-4070-a02a-6f2ca359642a\" target=\"_blank\" rel=\"noreferrer noopener\">scarcity<\/a> of graduate positions comes as many employers have been holding on to existing staff while cutting back on new hires. Some observers, meanwhile, <a href=\"https:\/\/abcnews.go.com\/Business\/ai-risks-broken-career-ladder-college-graduates-experts\/story?id=122527744\" target=\"_blank\" rel=\"noreferrer noopener\">contend<\/a> that entry-level roles in professional occupations are particularly exposed to AI displacement, though it\u2019s hard to disentangle any potential impact here given the broader caution towards hiring overall in the present environment.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXfzZeanzjyYZ2gi5NfZiox4TPUqGBH0JXUoHC20nw6G6ZkjzkaW0rG32dFxgZvflYnOhtXv8mrd6QFA2eqM_g0Gf7QXVv4edQ0xGDnXE5xUmiT-RLStVJfXkdGWWhJprpBYQQ5u2A?key=2hgwcQIMAUjbf4NeEW1DgQ\" alt=\"Line chart titled \u201cUK graduate jobs share is lowest since at least 2018\u201d shows graduate job postings as a share of all UK postings. As of 13 June, the share is the lowest since at least 2018.\u00a0\" \/><figcaption class=\"wp-element-caption\"><em>Line chart titled \u201cUK graduate jobs share is lowest since at least 2018\u201d shows graduate job postings as a share of all UK postings. As of 13 June, the share is the lowest since at least 2018.\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Zero-hours contracts have started to decline\u00a0<\/h2>\n\n\n\n<p>The government\u2019s workers\u2019 rights bill includes <a href=\"https:\/\/www.theguardian.com\/uk-news\/2025\/mar\/04\/uk-ban-on-zero-hours-contracts-agency-workers-employment-rights-bill\" target=\"_blank\" rel=\"noreferrer noopener\">proposed changes<\/a> around zero-hours contracts. Though zero-hours contracts won\u2019t be banned should workers agree to sign up to them, employers will first have to offer a contract that guarantees a minimum number of hours every week. Ahead of this legislation, the share of job postings mentioning zero-hours arrangements has started to ebb, standing at 1.8% as of May, down from a peak of 2.2% back in January.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXfeko5k8HARrE7Hxx9R6qBDbnUce4OOv0mda2tht58jXgymzUtaaMYH1nL1paXdSAsYgGsrh8PGM_OU_PsJ8nzR5Ql_9PGZcyVMR8qwYFwDJVS4fXE8nt4ToRKzjmCaq0qIrx9z?key=2hgwcQIMAUjbf4NeEW1DgQ\" alt=\"Line chart titled \u201cZero-hours contracts have dipped from peaks\u201d shows the share of UK job postings mentioning zero-hours arrangements from April 2022 to May 2025. The share has dipped from a peak of 2.2% to 1.8% of job postings.\u00a0\u00a0\" \/><figcaption class=\"wp-element-caption\"><em>Line chart titled \u201cZero-hours contracts have dipped from peaks\u201d shows the share of UK job postings mentioning zero-hours arrangements from April 2022 to May 2025. The share has dipped from a peak of 2.2% to 1.8% of job postings.\u00a0\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Remote and hybrid work remains close to highs<\/h2>\n\n\n\n<p>The share of UK job postings mentioning remote or hybrid work remains high at 15% as of end-May, down from a peak of 16.6% back in March, but well above the levels of around 3% seen pre-pandemic. Despite attention on return-to-office (RTO) calls from a number of businesses, remote and hybrid work continues to be widely offered. Even in categories such as banking &amp; finance, where RTO calls have been <a href=\"https:\/\/www.ft.com\/content\/f5833281-1fb6-419b-bd73-f545cc226b9b\" target=\"_blank\" rel=\"noreferrer noopener\">loudest<\/a>, the share of remote\/hybrid roles remains elevated at 39%, down from a peak of 45% in February 2024.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXdZfqYY4Ex2Oj1gzMOsG7TmBVP5Gby8l0h8nH4TnSoFfaY6MEOs5CWJFwvIwUURSPoHRKVclzcJdLhqGF-3rpBlt2mm51BvhP7ZR3wu453eiUPY-giFwCF2g0OQqvn5zbTPnlT_Jg?key=2hgwcQIMAUjbf4NeEW1DgQ\" alt=\"Line chart titled \u201cRemote\/hybrid postings share remains close to peaks\u201d shows the percentage of job postings containing remote and\/or hybrid terms from 2020 to 2025. The share has dipped from peaks but remains well above pre-pandemic levels at 15% as of end-May.\u00a0\" \/><figcaption class=\"wp-element-caption\"><em>Line chart titled \u201cRemote\/hybrid postings share remains close to peaks\u201d shows the percentage of job postings containing remote and\/or hybrid terms from 2020 to 2025. The share has dipped from peaks but remains well above pre-pandemic levels at 15% as of end-May.\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">UK leads peers in GenAI jobs growth<\/h2>\n\n\n\n<p>Job postings related to generative artificial intelligence continue to grow rapidly as organisations continue to develop and integrate the new technologies in their businesses. The UK has emerged as an early leader among large developed economies, with GenAI jobs now representing 0.5% of all postings, as of end-May.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXcQsjuao3hYy5jlIx-sSPbEUaxbtSfywKrnV08Bxcnz24YfbhsGbKM49bHHrsG9M2szZzIdHrArPHjkaBvdaTYac3_COSmXspviH0gfg_Z8P4Rivprakm-nPfe3Jq9cOa8xdzaS?key=2hgwcQIMAUjbf4NeEW1DgQ\" alt=\"Line chart titled \u201cGenAI jobs are rare but growing fast\u201d shows the share of job postings related to Generative AI from January 2019 to May 2025. GenAI postings have grown rapidly over the past two years, but are still a small fraction of total postings.\u00a0\" \/><figcaption class=\"wp-element-caption\"><em>Line chart titled \u201cGenAI jobs are rare but growing fast\u201d shows the share of job postings related to Generative AI from January 2019 to May 2025. GenAI postings have grown rapidly over the past two years, but are still a small fraction of total postings.\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>The UK labour market continues to soften, but hasn\u2019t crashed since April\u2019s policy changes came into effect. While hiring appetite is weak, job losses have remained modest, and the labour market is still somewhat tight by historical standards, supporting gradual easing but still strong wage growth. Offering flexibility remains a powerful tool for employers in recruitment and retention, and hybrid work remains prevalent. But graduates and other new entrants to the labour market face a challenging landscape in securing a first rung on the ladder.&nbsp;<\/p>\n\n\n\n<p><strong>Methodology<\/strong><\/p>\n\n\n\n<p>Data on seasonally adjusted Indeed job postings are an index of the number of seasonally adjusted job postings on a given day, using a seven-day trailing average. Feb. 1, 2020, is our pre-pandemic baseline, so the index is set to 100 on that day. We seasonally adjust each series based on historical patterns in 2017, 2018, and 2019. We adopted this methodology in January 2021.&nbsp;<\/p>\n\n\n\n<p>To calculate the average rate of wage growth, we follow an approach similar to the Atlanta Fed <a href=\"https:\/\/www.atlantafed.org\/chcs\/wage-growth-tracker\" target=\"_blank\" rel=\"noreferrer noopener\">US Wage Growth Tracker<\/a>, but we track jobs, not individuals. We begin by calculating the median posted wage for each country, month, job title, region and salary type (hourly, monthly or annual). Within each country, we then calculate year-on-year wage growth for each job title-region-salary type combination, generating a monthly distribution. Our monthly measure of wage growth for the country is the median of that distribution.\u00a0<\/p>\n\n\n\n<p>The number of job postings on Indeed.com, whether related to paid or unpaid job solicitations, is not indicative of potential revenue or earnings of Indeed, which comprises a significant percentage of the HR Technology segment of its parent company, Recruit Holdings Co., Ltd. Job posting numbers are provided for information purposes only and should not be viewed as an indicator of performance of Indeed or Recruit. Please refer to the Recruit Holdings investor relations website and regulatory filings in Japan for more detailed information on revenue generation by Recruit\u2019s HR Technology segment.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The UK labour market continues to soften, but hasn\u2019t crashed since April\u2019s policy changes came into effect.<\/p>\n","protected":false},"author":103,"featured_media":13911,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"recruiter-hub-blocks.php","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[1],"tags":[253],"post_mwm_category":[349],"post_topic":[],"post_content_type":[],"post_duration":[],"post_actions":[],"post_franchise":[],"post_mwm_author":[305],"class_list":["post-13910","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-multimedia","post_mwm_category-state-of-the-labour-market","post_mwm_author-jackkennedy"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>UK Mid-Year Labour Market Update 2025: Continuing to Steadily Cool - Indeed Hiring Lab UK I Ireland<\/title>\n<meta name=\"description\" content=\"The UK labour market continues to soften, but hasn\u2019t 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