.jpg)
LONDON — The UK labour market has hit a significant milestone, with the number of job vacancies tumbling to a five-year low. According to new research from job search site Adzuna, available roles are now approaching levels not seen since the height of the COVID-19 pandemic.
Advertised jobs slid by 3% in January down to 695,000. This marks a continuation of a downward trend seen throughout late 2025 and is the first time vacancies have dropped below the 700,000 mark since January 2021. Compared to the same time last year, job openings have contracted by 16%, and are down nearly 20% compared to just six months ago.
Youth and Graduate Jobs Hit Hardest
The data paints a particularly challenging picture for young people entering the workforce. For the first time since Adzuna began tracking the metric in 2016, graduate jobs fell below 10,000.
This research arrives just days after official figures revealed that overall unemployment in the UK had risen to a five-year high of 5.2%. Young people appear to be bearing the brunt of this hiring slowdown. Unemployment among 18- to 24-year-olds surged to 14% in the final three months of 2025—the highest rate in five years (or nearly 11 years if the pandemic anomaly is excluded). This has sparked widespread concern that Britain is slipping down the global youth employment league table.
The Impact of Budget Policies and AI
Industry experts highlight that job opportunities have shrunk sharply since mid-2025. Employers have noticeably reined in their recruitment drives in response to increased costs. The increases in national insurance contributions and the minimum wage, announced by Chancellor Rachel Reeves in her recent budgets, have forced many businesses to rethink their headcount.
Furthermore, the extra cost of labour is pushing some companies to bypass traditional recruitment altogether, prioritising investments in automation and Artificial Intelligence (AI) tools to streamline operations.
Regionally, the decline is being felt nationwide, but London experienced the sharpest monthly drop, with advertised roles falling by almost 6% in January alone.
Rising Competition and The Search for Work
With fewer roles available, competition has naturally intensified. The research indicates there are now 2.4 jobseekers for every single vacancy, an increase from 2.27 in December. Currently, the most searched-for roles include warehouse staff, healthcare support workers, lorry drivers, labourers, and kitchen assistants.
"Although competition for roles remains high, these pockets of strength suggest businesses are beginning to adapt to tougher conditions and invest where it matters," said Andrew Hunter, co-founder of Adzuna. "For jobseekers in early 2026, the market remains challenging, with fewer vacancies and intense competition, but continued wage growth suggests employers are still willing to pay for the right skills."
The Silver Lining: Wage Growth
Despite the gloomy hiring landscape, there is one major bright spot for active jobseekers: pay checks are still growing.
Average advertised salaries rose to £43,289 in January. This represents an almost 6% annual increase, meaning that wage growth is still comfortably outpacing the UK's inflation rate, which fell to 3% last month. For candidates with the right skills, the financial rewards remain strong, even if the roles are harder to find.
Key Takeaways:
Total Vacancies: Advertised roles dropped by 3% in January to 695,000, slipping below 700,000 for the first time since January 2021.
Graduate Impact: Entry-level graduate jobs fell below 10,000—a record low since tracking began in 2016.
Economic Pressures: Employers are slowing down hiring due to rising national insurance contributions, higher minimum wages, and a shift toward AI automation.
Wage Growth: Despite fewer jobs, average advertised salaries rose to £43,289 (an almost 6% annual increase), comfortably outpacing the 3% inflation rate.