{"id":13921,"date":"2025-07-24T20:07:29","date_gmt":"2025-07-24T19:07:29","guid":{"rendered":"https:\/\/www.hiringlab.org\/uk\/?p=13921"},"modified":"2025-08-12T16:29:52","modified_gmt":"2025-08-12T15:29:52","slug":"july-2025-uk-labour-market-update-cooling-but-not-crashing","status":"publish","type":"post","link":"https:\/\/www.hiringlab.org\/uk\/blog\/2025\/07\/24\/july-2025-uk-labour-market-update-cooling-but-not-crashing\/","title":{"rendered":"July 2025 UK Labour Market Update: Cooling but Not Crashing"},"content":{"rendered":"\n<p><strong>Key points:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>UK job postings have gradually softened this year and were 22.2% below their pre-pandemic baseline as of early July.<\/li>\n\n\n\n<li>The labour market is still somewhat tight, with 2.2 unemployed people per vacancy \u2014 below the long-run average of 2.8.<\/li>\n\n\n\n<li>Wage growth has eased but remains robust.<\/li>\n<\/ul>\n\n\n\n<p><em>Our Labour Market Updates examine important trends using Indeed and other labour market data. Our <\/em><a href=\"https:\/\/d341ezm4iqaae0.cloudfront.net\/hiringlaborg\/sites\/3\/2025\/07\/02171004\/European_Chartbook_July25.pptx.pdf\" target=\"_blank\" rel=\"noreferrer noopener\"><strong><em>European Labour Market Overview chartbook<\/em><\/strong><\/a><em> provides a more comprehensive view of the European labour market. Other data, including the Indeed Wage Tracker, are regularly updated and can be accessed on our <\/em><a href=\"https:\/\/data.indeed.com\/#\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong><em>data portal<\/em><\/strong><\/a><em>.<\/em><br><br>The UK labour market continued its now-familiar pattern in recent weeks, marked by a persistently subdued hiring appetite, limited employment declines, and easing \u2014 but still robust \u2014 wage growth.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Job postings remain subdued&nbsp;<\/strong><\/h2>\n\n\n\n<p>UK job postings maintained their steady decline in recent weeks. As of 18 July, they stood 22.2% below their 1 February 2020, pre-pandemic baseline. Postings were broadly unchanged from their level one month ago, but down 17.1% from the same time last year.&nbsp;<\/p>\n\n\n\n<p>The UK economy delivered a <a href=\"https:\/\/www.bbc.com\/news\/articles\/cq6mvem8neno\" target=\"_blank\" rel=\"noreferrer noopener\">sluggish<\/a> performance in Q2, as measures of employer confidence <a href=\"https:\/\/www.cipd.org\/en\/about\/press-releases\/employer-confidence-falls-to-record-low-as-uk-employers-face-rising-costs-cipd-report\/\" target=\"_blank\" rel=\"noreferrer noopener\">dropped to record lows<\/a> amid <a href=\"https:\/\/www.bbc.co.uk\/news\/explainers-63635185\" target=\"_blank\" rel=\"noreferrer noopener\">rising employment costs<\/a> and global uncertainty. Against this backdrop, hiring demand has continued to weaken. The UK remains an outlier among peer economies, with hiring demand in most developed nations still above pre-pandemic baselines.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXfAtjpkY-sbK-ENSWeN4-IkSckC5ve9BQdJ_XdOKU91xo4eHdIMAiDYPDbAvznsAWijG7inMu-By3-RYXj6871GHLvAZ1bOaMX2rhiQ2QpVEz27nuU-NhK0KP3RsnuR-Q1jI8pgnQ?key=14UUhi8k4qHIxkcL08vBog\" alt=\"Line chart titled \u201cUK job postings remain well below pre-pandemic levels\u201d shows the Indeed Job Postings Index from 1 February 2020 to 18 July 2025 in the UK, US, France, Germany, Italy and Ireland. The UK is the only one of those countries where job postings are below their pre-pandemic baseline.\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 from 1 February 2020 to 18 July 2025 in the UK, US, France, Germany, Italy and Ireland. The UK is the only one of those countries where job postings are below their pre-pandemic baseline.\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n<p>Sectoral performance remains varied, though most categories have continued to slow over the past year. Employer demand for workers relative to pre-pandemic norms is highest in the real estate, education &amp; instruction and social science categories. By contrast, nursing, beauty &amp; wellness and media &amp; communications are furthest below baseline.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXfs9jppKh3tljlxvSDIvLAsSRiDaY20R-v5Dyfiy_i9oRqlJSC3skqyWrvQ0O82BFSsYRKveKMtEdLMOVoVuUykJIbV9GNbbeIndZkbkNcNs56ascdXSMnh5LD_hCObAvjAsWjl?key=14UUhi8k4qHIxkcL08vBog\" alt=\"Table titled \u201cSectoral strength varies\u201d shows the UK Job Postings Index as of 18 July 2025 for the strongest and weakest performing occupations. Education &amp; instruction is the strongest performer, while nursing is the weakest.\u00a0\" \/><figcaption class=\"wp-element-caption\"><em>Table titled \u201cSectoral strength varies\u201d shows the UK Job Postings Index as of 18 July 2025 for the strongest and weakest performing occupations. Education &amp; instruction is the strongest performer, while nursing is the weakest.\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n<p>The latest Office for National Statistics data paint a similar picture of a <a href=\"https:\/\/www.hiringlab.org\/uk\/blog\/2025\/07\/18\/uk-employment-figures-july-2025-ongoing-slowdown\/\" target=\"_blank\" rel=\"noreferrer noopener\">gradually slowing labour market<\/a>. Notably, there was a substantial revision to May\u2019s payrolled employment figure, which initially showed a 109,000 monthly drop. The revised estimate <a href=\"https:\/\/www.ons.gov.uk\/employmentandlabourmarket\/peopleinwork\/earningsandworkinghours\/bulletins\/earningsandemploymentfrompayasyouearnrealtimeinformationuk\/latest\" target=\"_blank\" rel=\"noreferrer noopener\">indicates<\/a> a less alarming decline of 25,000 jobs. June\u2019s initial estimate showed an employment decline of 41,000 jobs last month, suggesting a labour market that remains fragile but has yet to show signs of a more material deterioration.\u00a0<\/p>\n\n\n\n<p>Vacancies have steadily declined for three years and now stand at 727,000, down from a peak of 1.3 million. With the unemployment rate having crept up to 4.7%, that means there are now 2.3 unemployed people for each vacancy \u2014 up from a low of 1 back in 2022, when the labour market was at its tightest. The ratio is slightly above its level just prior to the pandemic, but remains below its 2001-2025 average of 2.8.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXfKgb_9UrLRmOpTiGggI6jfq9nWBVJ_x7fG_0zesSl5OkFSITgeBoQTfli4Di1twR9LdrbsUMOtNrlTgT6pM76AEENiFmaWplx6F7Q0wY0Ikwqutxdt_ZuYDvAtyW9ak_yel6crdQ?key=14UUhi8k4qHIxkcL08vBog\" alt=\"Line chart titled \u201cUK labour market continues to gradually loosen\u201d shows the ratio of unemployed people to vacancies from 2001 to 2025. The ratio stands at 2.3 as of May 2025.\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 2025. The ratio stands at 2.3 as of May 2025.\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Wage growth remains robust, despite easing&nbsp;<\/strong><\/h2>\n\n\n\n<p>The still somewhat tight labour market continues to support robust posted wage growth. The Indeed Wage Tracker showed year-on-year wage growth of 5.5% in the three months to June. Though below recent peaks, UK annual posted wage growth remains well above equivalent measures for the euro area (2.8%) and the US (2.9%).&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXdY6uU1UhE4j36V8L1vTm8bIMFVz_4pge7hbiBgaTu0qdghfegCVpQJ4H5FbG0W_O6dMCrw_2r7mWsevfeqdeZ7ZrW78cBrYRmZHKg-3XtINLVYJwHqUo-5YANbTwakFfgWriWDnw?key=14UUhi8k4qHIxkcL08vBog\" alt=\"Line chart titled \u201cUK posted wage growth remains high\u201d shows annual growth in posted wages in the UK, US and euro area. UK posted wage growth held steady at 5.5% year-on-year in June, with the euro area at 2.8% and the US at 2.9%.\u00a0\" \/><figcaption class=\"wp-element-caption\"><em>Line chart titled \u201cUK posted wage growth remains high\u201d shows annual growth in posted wages in the UK, US and euro area. UK posted wage growth held steady at 5.5% year-on-year in June, with the euro area at 2.8% and the US at 2.9%.\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n<p>Several categories continue to see strong annual wage growth, led by physicians &amp; surgeons (7.9%), legal (6.5%), retail and dental (both 6.4%).&nbsp;<\/p>\n\n\n\n<p>The slowest wage growth in June was in software development (1.2%), project management (2.6%) and accounting (4.3%).&nbsp;<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXeC1d2V1ihL2oTLH3pjSCCrz2PnMC0Ay_Uhx3LxKeL1_lzR2L3xk7gxz_Gpr2sZqIIPjR4s8PI4hqgbzbvEJoivaD5ANc0DzeEO_MHFclzp-YCJwVLaFJnBw3y8C7JqiHodLDJ3dA?key=14UUhi8k4qHIxkcL08vBog\" alt=\"Table titled \u201cSeveral occupations continue to see strong wage growth\u201d shows the annual wage growth for occupational categories in the three months to June. Physicians &amp; surgeons had the highest wage growth at 7.9%.\u00a0\" style=\"width:488px;height:auto\" \/><figcaption class=\"wp-element-caption\"><em>Table titled \u201cSeveral occupations continue to see strong wage growth\u201d shows the annual wage growth for occupational categories in the three months to June. Physicians &amp; surgeons had the highest wage growth at 7.9%.\u00a0<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h2>\n\n\n\n<p>The UK labour market has continued to gradually soften amid weak hiring demand, but is not currently showing signs of a more significant downturn. Should this occur, policymakers at the Bank of England would likely shift to more aggressive interest rate cuts. For now, however, they are likely to stick to their gradual stance as inflation remains a concern.&nbsp;<\/p>\n\n\n\n<p><strong>Hiring Lab Data<\/strong><\/p>\n\n\n\n<p>Job postings data is available on our <a href=\"https:\/\/data.indeed.com\/#\/\" target=\"_blank\" rel=\"noreferrer noopener\">Data Portal<\/a>. We also host the <a href=\"https:\/\/github.com\/hiring-lab\/data\" target=\"_blank\" rel=\"noreferrer noopener\">underlying job-postings chart data on <\/a>GitHub as downloadable CSV files. Typically, it will be updated with the latest data one day after this blog post is published.\u00a0<\/p>\n\n\n\n<p><strong>Methodology<\/strong><\/p>\n\n\n\n<p><em>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;<\/em><\/p>\n\n\n\n<p><em>To calculate the average rate of wage growth, we follow an approach similar to the Atlanta Fed <\/em><a href=\"https:\/\/www.atlantafed.org\/chcs\/wage-growth-tracker\" target=\"_blank\" rel=\"noreferrer noopener\"><strong><em>US Wage Growth Tracker<\/em><\/strong><\/a><em>, 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<\/em><\/p>\n\n\n\n<p><em>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.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The UK labour market has continued to gradually weaken, but does not appear to be nearing a 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