Key Points:
- Overall, the UK labour market has remained resilient, with stable employment and modest impending layoffs.
- Posted wage growth remains high but is gradually easing.
- Job postings are faltering ahead of April’s rise in employment costs and the weakening of the global economic outlook.
Our Labour Market Updates examine important trends using Indeed and other labour market data. Our European Labour Market Overview chartbook provides a more comprehensive view of the European labour market. Other data, including the Indeed Wage Tracker, are regularly updated and can be accessed on our data portal.
An ongoing puzzle in the UK labour market has been stubbornly strong wage growth even as hiring demand has weakened. While the reasons for that are debated, pay growth strength is finally showing signs of waning. If sustained, that could make it easier for the Bank of England to inject support for the economy by lowering interest rates faster.
Meanwhile, having been broadly stable in the months after the Chancellor’s Budget in October, UK job postings have shown a renewed dip in recent weeks. But hard data on redundancy notifications still don’t point to impending mass layoffs, despite employer confidence surveys having soured.
While it’s not hard to find reasons for gloom, economic data suggests growth momentum in the economy actually picked up during the first quarter of 2025. That could help the labour market ride out the current turbulence, maintaining the recent resilience seen in official employment figures.
Job postings slipping again
UK job postings fell sharply throughout most of 2024, stabilising briefly towards the end of the year before resuming their downward trend in 2025, and are down by 8.6% since the start of the year. Posting volume has likely been impacted by a significant rise in employment costs that take effect in April, including increases in employer National Insurance contributions and the minimum wage, along with a weaker global economic outlook as trade war fears mount.
The UK remains the only major economy where job postings are below their pre-pandemic baseline (-17%), with postings in peer economies at or above the baseline.
Wage growth eases
The Indeed Wage Tracker indicates a slowdown in UK posted wage growth in February, though it remains elevated. UK posted wage growth eased to a near three-year low of 5.7% year-on-year, but it remains well above equivalent measures for the euro area (2.5%) and the US (3.1%).
The ONS reported that annual growth in average weekly earnings eased slightly from 6.1% to 5.8% in the three months to January. Though the National Living Wage rose by 6.7% in April, that’s a smaller percentage increase than the 9.8% rise seen the previous year.
A sustained weakening of wage growth would make it easier for the Bank of England to pivot towards more aggressive interest rate cuts. Caution over possible inflation persistence, supported by robust wage growth, has prompted Bank policymakers to signal that only gradual rate cuts are on the cards — but that could change if wage gains continue to soften. Given long-standing lacklustre UK productivity growth, it could also ease pressure on businesses from a cost standpoint.
Redundancy notifications still haven’t spiked
Though concerns linger that increased employment costs could lead to a spike in job losses, that has not (yet) materialised in the hard data. The number of planned redundancies notified to the government hasn’t shown a meaningful uptick in recent months, despite downbeat business surveys.
Conclusion
The economic outlook remains uncertain, and it remains to be seen how the UK labour market both absorbs April’s domestic policy changes and weathers turbulence in the global economy. It has shown resilience so far, but will need to continue to do so in the face of strong headwinds. For employers, staying agile in a changing market continues to be necessary.
Hiring Lab Data
Job postings data is available on our Data Portal. We also host the underlying job-postings chart data on Github as downloadable CSV files. Typically, it will be updated with the latest data one day after this blog post is published.
Methodology
Data on seasonally adjusted Indeed job postings are an index of the number of seasonally adjusted job postings on a given day, using a seven-day trailing average. Feb. 1, 2020, is our pre-pandemic baseline, so the index is set to 100 on that day. We seasonally adjust each series based on historical patterns in 2017, 2018, and 2019. We adopted this methodology in January 2021.
To calculate the average rate of wage growth, we follow an approach similar to the Atlanta Fed US Wage Growth Tracker, but we track jobs, not individuals. We begin by calculating the median posted wage for each country, month, job title, region and salary type (hourly, monthly or annual). Within each country, we then calculate year-on-year wage growth for each job title-region-salary type combination, generating a monthly distribution. Our monthly measure of wage growth for the country is the median of that distribution.
The number of job postings on Indeed.com, whether related to paid or unpaid job solicitations, is not indicative of potential revenue or earnings of Indeed, which comprises a significant percentage of the HR Technology segment of its parent company, Recruit Holdings Co., Ltd. Job posting numbers are provided for information purposes only and should not be viewed as an indicator of performance of Indeed or Recruit. Please refer to the Recruit Holdings investor relations website and regulatory filings in Japan for more detailed information on revenue generation by Recruit’s HR Technology segment.
