British workers’ confidence in their job security has fallen to its weakest level in more than three-and-a-half years, adding to pressure on household sentiment as employment concerns combine with higher energy and borrowing costs.
New data from S&P Global show job security weakening across every surveyed sector except IT and telecommunications during September.
The findings, based on a panel of 1,500 UK households, put perceived job insecurity at its highest since February 2023. Retail workers reported the greatest concern about their employment prospects.
S&P Global’s overall consumer sentiment score also slipped to 42.7 in September from 42.9 in August, remaining below the neutral 50 level. Households reported continued reluctance to make expensive purchases including cars, holidays, and household appliances.
The measure captures perceptions rather than realised redundancies or unemployment, but employment confidence can influence economic behaviour before changes appear in official labour-market data. A household that feels less secure may defer discretionary spending even where its current income has not changed.
S&P Global economist Maryam Baluch said the rise in insecurity highlighted “a growing disconnect between rising economic growth and perceptions of employment security.”
She added: “September data show a downbeat mood spreading across UK households as improved sentiment surrounding the new government is eroded by renewed worries over energy prices, the cost of living and job prospects.”
The findings reinforce evidence that the labour market has cooled substantially. Recent official figures showed vacancies continuing to fall, while payroll employment remains lower than a year earlier and companies are cautious about expanding permanent headcount.
The picture is not uniformly weak. KPMG and the Recruitment and Employment Confederation reported a small increase in permanent placements during August, the first such rise since 2022, while temporary billings also improved.
Candidate availability remains high, however, after redundancies and subdued hiring increased the number of people seeking work. That gives employers a wider applicant pool without necessarily resolving shortages in specialist or technically demanding occupations.
Retail employees appear particularly exposed to the interaction between labour-market and consumer pressures. Businesses in the sector are managing higher employment costs, softer discretionary demand, energy prices, and disruption to some supply chains, while their employees are seeing many of the same pressures in household budgets.
Expectations for interest rates are contributing to the caution. A large share of consumers surveyed by S&P Global expected borrowing costs to rise rather than fall, increasing the likelihood that households with mortgages or other credit will protect cash rather than commit to major purchases.
That behaviour can feed back into corporate decisions. Lower household spending affects revenues in retail, hospitality, travel, automotive, and consumer services, potentially reinforcing caution around recruitment and investment.
The IT and telecommunications sector was the exception in September, with workers there reporting an improvement in job security. The relative resilience coincides with continued investment in AI, cybersecurity, cloud infrastructure, and digital transformation, although technology employment itself remains subject to restructuring and changing skills requirements.
Employment sentiment can also influence staff movement. Workers who feel uncertain about the labour market may become less willing to leave secure roles, reducing voluntary turnover even as employers gain access to a larger external candidate pool.
That can create a labour market that feels weak from both sides without being straightforwardly loose. Employees perceive greater risk, while businesses can still struggle to secure particular capabilities at an acceptable cost.
The September survey therefore adds a confidence measure to the more visible slowdown in vacancies and hiring. Employment remains high by historical standards, but households are becoming less certain that current jobs will remain secure, increasing the risk that caution spreads from recruitment decisions into consumer spending through the final quarter.
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