UK Hiring Slows as Wage Growth Cools Ahead of BoE Policy Watch

British hiring weakened through the first half of 2026, with job postings falling 11% between January and July 17 and sitting 32% below pre-pandemic levels, according to recruitment platform Indeed. The slowdown is relevant for sterling markets, as cooling labor demand is one of the factors monitored by the Bank of England when assessing the outlook for monetary policy.

Indeed senior economist Jack Kennedy said the UK labor market is under sustained pressure, with hiring demand falling across most sectors alongside gradually cooling wage growth — conditions he noted are hitting graduates and younger workers hardest as they compete for fewer entry-level roles.

Key data points:

1. Advertised wage growth: 3.9% annually (three months to June), the slowest pace since February 2022
2. Graduate postings: down 7% year-on-year as of July 10, lowest for this time of year since 2020
3. Summer/seasonal postings: weakest in four years
4. AI-related skills demand: appeared in 9.4% of job postings at end-June, a record high

The data suggests a mixed labor market, with broad-based hiring weakness alongside continued demand for AI-related roles.

Slower wage growth may support expectations that the Bank of England could consider easing policy if broader economic conditions continue to soften. Market participants are also likely to monitor upcoming UK economic data for additional policy signals.

Separately, PM Andy Burnham last week outlined plans to align technical education with local employment needs, targeting the more than one million 16-to-24-year-olds currently not in education, employment, or training.