The UK's nascent labour market under new Prime Minister Andy Burnham is off to a rocky start, with official statistics revealing a decline in job postings across the country. The Office for National Statistics (ONS) reported a fall of 7,000 vacancies between April and June this year, posing an early challenge for the government's economic strategy.
The ONS data show significant drops in sectors such as science and professional activities. While the overall unemployment rate remains steady at 4.9%, the number of payrolled employees saw only a modest increase of 3,000 between April and May, with an estimated decrease of 4,000 in July. Furthermore, pay growth, excluding bonuses, stood at 3.4%, which was below expectations, or 4.3% when bonuses were included.
Liz McKeown, director of economic statistics at the ONS, noted that the recent decrease in vacancies was primarily driven by smaller businesses, citing labour and operational costs as key factors influencing their decisions not to recruit new staff. This trend follows a period where job market performance was a critical indicator of public sentiment towards the previous government.
The previous government under Sir Keir Starmer faced widespread criticism from employers, who attributed a rise in unemployment since July 2024 to a £25bn increase in National Insurance paid by businesses. Economists suggested that this tax hike had hindered hiring efforts and contributed to inflation. Prime Minister Burnham has sought to differentiate his approach, promising a more pro-business stance and a focus on job creation, particularly through public procurement contracts.
With key appointments like John Healey as Chancellor, Jonathan Reynolds returning as Business Secretary (also overseeing technology and science), and Pat McFadden remaining as Work and Pensions Secretary, the new government will be central to navigating the UK's jobs market challenges. While Prime Minister Burnham has yet to outline specific policy details, promising a decade-long economic plan, economists will be closely monitoring job vacancies, unemployment figures, and earnings growth as crucial benchmarks for his premiership.