Businesses still hesitant to hire despite growing economy

Businesses are reluctant to hire, despite the UK economy expanding.

New figures show the GDP grew by 0.7% in the first quarter, but the job market is telling a different story.

Vacancies fell by almost 20% over the last year, with 852,703 roles available, job search platform Adzuna reports. The past month alone saw a drop of nearly 0.2%.

This hiring freeze is likely due to a combination of high interest rates and customers being more reluctant to spend, experts say.

The jobseeker pool is also expanding, with 1.95 candidates for every vacancy – the highest in three years. While average starting salaries have increased by 2.72% to £38,843, the increased competition for jobs is likely to slow down pay growth.

While professional services like law and PR are seeing vacancy increases – 8.46% and 3.78% respectively – consumer-facing sectors like hospitality and catering have seen roles drop by 5.32%. Healthcare and nursing roles also fell by 4.16%.

As the Bank of England prepares to announce its interest rate decision, some are hoping for a rate cut. Yet the central bank has said a cooling labour market is necessary before lowering interest rates.

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