- Unemployment holds steady at 4.4%
- Wage growth also holds up despite widening cracks in the labour market
- Vacancy numbers slip below pre-pandemic levels for the first time since 2021
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK jobs figures:
“For 33 months now vacancy numbers have been slipping back like sand falling through an hourglass monitoring the health of the UK jobs market.
“In March, the last remnants of a post pandemic boom that has helped the UK stay resilient in the face of scorching inflation, concern about increasing labour costs and latterly tariff turbulence finally ended. For the first time since 2021 when Covid-19 measures were still impacting our everyday lives, the number of job vacancies in the three months to March 2025 fell below pre-pandemic levels.
“It’s an important milestone to consider, coming as UK businesses made decisions about their employee levels ahead of increases to National Insurance costs and the National Living Wage. Jobs have been cut and hiring intentions have been impacted but the full extent of last year’s Budget changes won’t be really understood for several more months.
“What happens now the scale has begun to tip? Will unemployment begin to creep up or can the government’s plans to boost building offset any job losses?
“Looking at wage growth, which has remained elevated, suggests skills are still a massive issue for many employers, and something they’re willing to pay to keep in house. That data will be carefully weighed and considered by Bank of England rate setters who have the unenviable task of trying to plot a course through the tariff infested waters.
“Markets are betting that concern about the path of global economic growth will trump any lingering inflation jitters and at the moment expectation is that a May interest rate cut looks nailed on.
“There have been a lot of questions about the reliability of the ONS jobs data in recent times, and we must always remember that these numbers tell the story of where we were and not where we are going.”
