UK Labour Market Outlook Uncertain Post-Budget

The UK’s labour market outlook is uncertain following October’s budget announcement, according to data from Indeed. Although the economy broadly outperformed low expectations this year, job postings on the platform dropped by 24% in 2024, potentially signalling continued weakness into next year.

Key Findings from the 2025 Jobs & Hiring Trends Report

Indeed’s 2025 Jobs & Hiring Trends Report revealed that the UK experienced the largest decline in new job listings over the past year among major economies, including Australia, Canada, France, Germany and the US. Factors driving employer caution include:

• Rising labour costs: imminent increases in national minimum wage and employer National Insurance contributions.
• Higher business rates and reduced contribution thresholds.

Sectoral Job Posting Trends

Job postings fell across most occupational categories, with the steepest declines in:

• Veterinary roles
• Electrical engineering
• Security and public safety

The legal sector was the only one of the 48 tracked to see an increase. Categories offering the most remote working opportunities—particularly technology and other professional roles—also showed notable weakness.

Read more on the UK labour market outlook.

Wage Dynamics and Signing Bonuses

Indeed’s Wage Tracker indicated that average advertised salaries dipped slightly from a 7% high in June to 6.7% in October. A significant wage gap remains:

• Lower-paid roles: 7.6% year-on-year growth
• Higher-paid roles: 6.0% year-on-year growth

Meanwhile, the share of postings advertising a signing bonus fell from 2.1% in February 2023 to 1.0% in October 2024.

Rise of Zero-Hours Contracts

Contrary to government plans to restrict them, zero-hours contracts were mentioned in 1.9% of job ads in October—up from 1.1% in April 2022. Such contracts are most prevalent in:

• Sports
• Personal care and home health
• Hospitality and tourism

Pay Transparency and Flexible Working

Pay transparency has improved markedly over the past five years, with nearly 72% of UK job postings now including salary information, compared to less than 50% before the pandemic. Employers have become more aware of the benefits of transparency, such as:

• Better talent attraction
• Recruitment efficiency through early salary alignment

Remote and hybrid roles account for 14.6% of postings, down from 16.3% in May but still far above the 3% noted pre-pandemic. Even strictly on-site positions—such as veterinary, childcare and education roles—are increasingly offering flexible arrangements like four-day weeks.

Expert Commentary

Jack Kennedy, Senior Economist at Indeed, commented:

“The UK economy performed better than expected in 2024, but this doesn’t mean 2025 will be smooth-sailing. Much depends on the health of the labour market and the yet-to-be-seen impact of policy changes announced in the budget. The best-case scenario for many businesses will likely be sluggish job creation. For workers, higher employer National Insurance contributions and a softer job market could squeeze pay packets. As in recent years, attracting top talent will hinge on competitive pay and benefits, including flexible and remote working. However, falling job postings, declining signing bonuses and easing wage growth suggest that power is shifting back to employers, influencing how candidates approach interviews and negotiations in the new year.”

Further Reading

• In-depth UK Labour Market Analysis
• Impact of UK Budget on Employment Trends

About the Author: Kavitha Sivasubramaniam