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UK Jobs Market Hits 15-Year Low Amidst Uncertainty
9 Mar
Summary
- UK jobs market is at its weakest in nearly 15 years.
- Unemployment rose to a five-year high in late 2025.
- Services sector drives a modest rise in business output index.
The UK's labour market is currently in a fragile position, experiencing weak hiring demand and showing minimal signs of recovery. An employment index from BDO has recorded its weakest reading since March 2011, reflecting a significant contraction in the jobs market.
This downturn aligns with official figures showing UK unemployment surged to a five-year high in the final quarter of 2025, with youth unemployment also at an 11-year peak. The Office for Budget Responsibility anticipates unemployment to peak at 5.3% this year.
Despite these challenges, BDO's business output index, measuring economic activity, saw its highest level in a year, primarily driven by a stronger services sector. However, experts caution that global disruptions and persistent economic uncertainty hinder substantial growth.
Reports from KPMG and REC also confirm a continued fall in demand for both permanent and temporary hires, though the rate of decline has slowed. Engineering is the only sector showing improved demand for permanent staff, while retail and hospitality face the steepest reductions.
