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London hit hardest as job vacancies drop

London hit hardest as job vacancies drop

UK job vacancies fall to lowest since 2021, affecting London. The UK job market faces challenges as vacancies drop to their lowest since 2021, with London experiencing the most significant decline. Despite this, advertised salaries have risen faster than inflation.

The UK job market has encountered another setback, with total vacancies declining to their lowest level since 2021. London has been the hardest hit, experiencing the most substantial decrease in available positions.

According to job search platform Adzuna, the number of advertised jobs fell by 16% year-on-year to January, dropping below 700,000 for the first time since January 2021. The Labour Employment Rights Act has been criticised recently for increasing hiring costs for British businesses. Chief financial officers in the retail sector have indicated potential staff reductions as these reforms are implemented.

Adzuna reports that 694,940 roles were advertised in January, marking a 3% decrease from December. However, advertised salaries have outpaced inflation, rising by 6% from January 2025 to an average of £43,289.

London experienced the fastest monthly decline in hiring, with vacancies down by 5.6%. The East Midlands and North West England followed, with job openings 4% lower than in December.

Andrew Hunter, co-founder of Adzuna, stated that while economists suggest hiring rates are stabilising, the current data on advertised jobs indicates otherwise. January’s figures show hiring is nearing pandemic-era levels, with graduate roles at a record low, suggesting the market remains unstable.

Despite these challenges, Hunter noted resilience in steady wage increases and growth in sectors such as teaching and cleaning. He remarked that while the market remains challenging for jobseekers in early 2026, with fewer vacancies and intense competition, continued wage growth indicates employers are still willing to pay for the right skills.

Graduate vacancies have fallen below 10,000 for the first time since Adzuna’s tracker began in 2016, having nearly halved year-on-year by 45%. Youth unemployment is at its highest level, 16.1%, since 2014, surpassing the EU average for the first time. Entry-level job vacancies decreased by 4% annually to 197,044.

The IT sector remained the highest-paid in January, with average salaries rising to £63,428, while maintenance jobs experienced the most significant annual pay decline at 3%.

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BQ

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