Job vacancies fall to five-year low as small firms rein in hiring

The jobs market has taken another hit

The Office for National Statistics said smaller businesses were scaling back recruitment, citing labour and operating costs.

Firms have pointed to higher energy bills since the start of the war in Iran, alongside increases in National Insurance and the minimum wage that have made staff more expensive.

Unemployment held at 4.9% and the ONS described the labour market as “little changed overall”, but payrolled employees fell by 13,000 in June, with a further 13,000 drop estimated for July.

Regular earnings grew 3.5% annually in the three months to June, 6.1% in the public sector, but just 2.8% in the private sector, the slowest for nearly six years, according to the ONS release.

With private-sector pay growth that weak, what is left at the end of the month matters more, and Joe has broken down what the social care reforms will mean for your payslip.

What falling job vacancies mean for the labour market

The figures have been widely read as a worrying sign for the economy.

"The UK labour market remains stuck in a low-churn limbo, with employers reluctant to hire, fire or offer bigger pay rises as they grapple with rising costs, intensifying global headwinds and heightened policy uncertainty. The persistent slide in vacancies is a red flag for the jobs market."

- Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales

Work and Pensions Secretary Pat McFadden said it was “encouraging to see signs of progress”, citing Universal Credit reforms. Shadow chancellor Mel Stride countered: “Job vacancies are at their lowest in over five years, and unemployment remains high. Labour are the party of welfare, not work.”