Retail and hospitality hit hardest as UK jobs market cools

The UK jobs market has continued to cool as the number of vacancies fell and the number of people on payrolls also dropped, according to the latest figures from the Office for National Statistics.

The ONS said this was evidence that firms were either not recruiting new workers or weren’t replacing people who have left.

ONS director of economic statistics Liz McKeown said that the cooling economy was being led by a shrinking in paid roles in the retail and hospitality sectors.

“The number of employees on payroll has now fallen in 10 of the last 12 months, with these falls concentrated in hospitality and retail,” she said.

“Job vacancies, likewise, have continued to fall, also driven by fewer opportunities in these industries.”

Across the board, job openings fell by 5.8% to 718,000 between May and July across all sectors.

Average wage growth for the period remained at 5%, while unemployment remained flat at 4.7%, and the 8,000 drop in people on payrolls was a “very gradual cooling” according to former Bank of England policymaker Andrew Sentence.

There are currently more than 30 million people on employer payrolls in the UK.

Capital Economics UK economist Ashley Webb said the “modest fall” in the payroll data showed that the fallout in jobs market from the increase in business taxed and the minimum wage was “calming down”.

Dee Corsi, chair of High Streets UK, said: “The latest figures on the UK jobs market are a reminder that the growing cost of doing business has a tangible impact on the prospects of working people. With trading conditions already challenging, and margins in sectors like retail, hospitality and leisure razor-thin, businesses can no longer absorb any further costs.

“The Government’s proposed business rates reforms – which would dramatically raise the rates bill for anchor stores across the country – will place an unsustainable burden on flagship, city centre high streets. These locations are key drivers of economic growth and job creation, but current plans put that at risk.

“That’s why we are urging the government to take seriously the concerns of all high street businesses and reconsider the proposed reforms. High streets, particularly those in flagship, city centre destinations, can play an instrumental role in pushing forward the government’s growth agenda, creating jobs and attracting investment. We must create the right conditions for these locations to thrive if we are to truly unlock their potential.”