UK labour market cools further, online jobs data shows

• Job vacancies dropped from 745,448 in November to 716,791 in December, marking a 15% annual decline and the weakest full year since 2020
• Advertised salary growth decelerated to 6.8% year-over-year from 7.7% in November, indicating easing wage inflation pressure
• The CBI's growth indicator improved slightly to -20 from -30, but overall business sentiment remains cautious with confidence described as 'fragile'

UK Labour Market Shows Continued Cooling in December

Britain's job market deteriorated further in December, with online jobs portal Adzuna reporting vacancies fell to 716,791 from 745,448 in November—a 15% year-over-year decline marking the weakest full year since the COVID-19 pandemic in 2020. This represents the sixth consecutive monthly decrease.

Key Figures:

• Job vacancies: 716,791 (December)
• Year-over-year decline: 15%
• Advertised salary growth: 6.8% (down from 7.7% in November)

Market Implications:

The cooling labour market data is significant for Bank of England policymakers monitoring inflation pressures as they consider potential interest rate cuts in 2026. Despite tentative economic recovery signals from businesses and consumers, hiring has slowed across major UK sectors, with the traditional year-end hiring boost failing to materialize.

Adzuna co-founder Andrew Hunter noted intensified competition for roles but identified potential "green shoots" in graduate and entry-level positions that could signal recovery ahead.

Broader Economic Context:

The Confederation of British Industry (CBI) survey corroborated the cautious outlook. While its growth indicator improved to -20 from -30 in December, overall activity gauges remained deeply negative. CBI deputy chief economist Alpesh Paleja described businesses as remaining cautious with fragile confidence, noting households are downtrading despite some stabilization in specific areas.

Bottom Line:

The persistent decline in job vacancies and slowing wage growth suggest sustained labour market weakness, potentially supporting the case for monetary policy easing while raising concerns about economic momentum heading into 2026.