UK vacancies run at 1m in every month for last two years 

UK businesses are still hungry to take on workers despite the economy slowing under the weight of high inflation and interest rates, a new survey out today shows.

Vacancies are up for the fifth month in a row and have now been at least 1m in every month since June 2021, according to research by job search site Adzuna.

It signals that companies are still keen to take on staff despite the UK economy stalling due rising prices and the Bank of England’s efforts to tame them with tighter monetary policy.

Gross domestic product was unchanged in the three months to May and annual growth is expected to barely reach 0.5 per cent this year and one per cent next.

Although down quicker than expected in June to 7.9 per cent from 8.7 per cent, inflation is still very high and has been outpacing wage growth, keeping consumer spending subdued.

In economic downturns, demand for companies’ products typically falls, meaning there is less impetus for them to take on workers.

However, Adzuna’s figures show firms are confident the UK’s economic slump will be short lived and relatively shallow.

Although open roles have contracted 12 per cent over the last year, it is an uptick from the 16.8 per cent and 19.45 per cent annual drop in May and April respectively.

“If this trend continues, hiring should be back at 2022’s record levels by the end of the year,” Adzuna said.

Official figures from the Office for National Statistics show unemployment has barely risen over the last year and is now at four per cent, reinforcing Adzuna’s research. A strong jobs market “demonstrates that the UK is on the path to long-term recovery,” Adzuna added.

Workers who have left the labour force since the beginning of the pandemic are returning, easing workforce tension by expanding the pool of potential staff available to companies. 

In the last three months, there were an additional 280,916 people in economic inactivity compared to the quarter before the onset of the pandemic. That is down from a peak of nearly 642,000.

There were 1.47 applicants for every open role in June, up from 1.45 in May.

Cost of living pressures, compounded by employers lifting starting pay to outbid competitors in the race for talent, is keeping wage growth elevated at 3.6 per cent. Adzuna’s estimate is far lower than the ONS’s 7.3 per cent number.

Accelerating pay is alarming officials at the Bank of England who claim it will bake in high inflation over the long run.

Governor Andrew Bailey after last month’s 50 basis point interest rate rise said the current strength of wage and price setting are “unsustainable”.

He and the rest of the monetary policy committee are expected to vote for a 14th straight rate rise on 3 August, probably by 25 basis points.

Salaries are increasing in every region of the UK – except in London, where they fell 1.3 per cent over the last year to an average of £44,225.