Britain's job market floundering' as companies remain cautious about hiring

"A monthly employment index from BDO, an accountancy and consultancy firm, is running at its weakest level in nearly 15 years. It has had its worst reading since March 2011, when the jobs market was still recovering from the financial crash. The index which monitors trends in hiring intentions, headcount and demand for labour was 93.30 in February, the same figure as January, continuing a run of multi-year lows."

"The survey aligns with official figures that showed unemployment in the UK rose to a five-year-high of 5.2% in the final quarter of 2025 and a near-11-year high for young people. The Office for Budget Responsibility said last week unemployment would peak at 5.3% this year, up from its forecast in November of 4.9%."

"It said the rise had been caused by businesses cutting back on hiring rather than laying off staff, which had a bigger impact on young people who were entering the workforce. BDO also reported that its business output index which measures activity across the main sectors in the British economy rose to its highest level in a year."

Britain's labour market faces significant challenges with companies maintaining cautious hiring practices due to cost pressures and economic uncertainty. The BDO employment index reached its weakest level in nearly 15 years at 93.30 in February, indicating contraction as figures below 95 signal decline. Unemployment rose to 5.2% in late 2025, a five-year high, with young people particularly affected as businesses reduce hiring rather than laying off staff. The Office for Budget Responsibility projects unemployment will peak at 5.3% in 2025. While the business output index improved to 98.80, driven by the services sector and marking three consecutive months of recovery, meaningful employment recovery remains limited in the near term.

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