The UK’s job market has experienced a significant downturn, with total vacancies falling to their lowest level since 2021. According to Adzuna, job advertisements dropped 16% year-on-year to January, falling below 700,000 for the first time since January 2021. The data shows that 694,940 total roles were being advertised in January, marking a 3% month-on-month decline. However, advertised salaries were up 6% from January 2025, hitting an average of £43,289. The report also shows that graduate roles have fallen to below 10,000, while youth unemployment has reached 16.1%, the highest since 2014. Andrew Hunter, Adzuna’s co-founder, said: “The market remains challenging, with fewer vacancies and intense competition.” He added, however, that “continued wage growth suggests employers are still willing to pay for the right skills.”

JPMorgan forecasts that UK unemployment will rise to 5.5% within months, surpassing the peak of 5.3% recorded during the pandemic. The bank predicts two million people will be jobless in the first half of the year, largely due to the impact of the £25bn increase in National Insurance contributions. Chief UK economist Allan Monks said: “Over a year has passed since the tax hike and the jobs market is still stagnating.” He warned that without recovery, joblessness could reach 6% by year-end, prompting potential interest rate cuts by the Bank of England.

Analysis by RSM UK shows that applications for UK tech visas from overseas workers have decreased by 11%, falling from 8,739 in Q2 2025 to 7,768 in Q3. This decline raises concerns about talent shortages in the tech sector. James Bull, senior analyst at RSM UK, said: “Tech businesses are being hit with both a decline in skilled immigration and existing talent shortages.” He added: “The war on talent is a real issue in the tech industry. Individuals with the ‘right’ specialist skills are few and far between, and businesses are struggling to upskill their existing staff fast enough.” The Government is attempting to attract talent, with AI Minister Kanishka Narayan, having announced that a dedicated AI talent stream would reimburse visa fees and speed up processing for international skilled workers.

Private equity funds returned fewer profits to investors for the fourth consecutive year in 2025, according to a report from Bain & Company which warned that fundraising for new funds had become a “slow and difficult slog.” The analysis shows that distributions relative to net asset value have not exceeded 15% since 2021, leading to a liquidity crunch for new fundraising. The report highlights that buyout funds are struggling to exit investments at acceptable prices due to rising interest rates and economic challenges. Despite these challenges, deal values rose by 44% in 2025 and the report’s authors said 2026 is “shaping up as promising.” They added: “Black swan events have come in flocks over the last few years, making forecasts especially perilous. But barring another jolt to the system, the conditions supporting more deal and exit activity appear to be improving.”

A Confederation of British Industry and Energy UK report reveals that 40% of UK firms have reduced investment due to soaring energy costs, which remain 70% higher than pre-Ukraine invasion levels. The report highlights the urgent need for a comprehensive review of energy regulations to stimulate investment and economic growth. Louise Hellem, CBI’s chief economist, said: “You can see it already in the chemicals industry, which has seen several closures.” Without action, the risk of job losses and production cuts will increase, jeopardising the UK’s industrial future.

The UK economy is grappling with a significant rise in low productivity firms, according to a new report from Boston Consulting Group (BCG). Between 1997 and 2023, firms in the bottom 25% of productivity nearly doubled, increasing from 444,500 to 873,000. Raoul Ruparel, chief UK economist at BCG’s Centre for Growth, noted that a lack of “business dynamism” allows these firms to persist, saying: “We’ve seen lower productivity firms being able to survive for longer.” The report highlights that productivity growth has slowed across key sectors since the financial crisis, with the UK economy potentially £557bn larger if pre-crisis trends had continued. Warning that there is a “diffusion problem,” Mr Ruparel said: “We have some of the most innovative firms and, at the top end, our most productive firms have been growing productivity strongly… But then there is this long tail.”

As Scotland’s parliamentary elections approach, the SNP and Greens have declared support for introducing a wealth tax. Critics argue that such taxes lead to capital flight and reduced economic growth. Brian Monteith, a former member of the Scottish and European parliaments, warns that the plans “would turn Scotland into an economic wasteland reliant on a public sector unable to raise the revenues to maintain high-quality services.” Arguing that such a tax could harm the country’s economy, he said: “It would be the antithesis of a successful Scotland.”

The Dutch parliament’s recent vote to reform capital gains tax has sparked significant debate. Starting in 2028, investors will face a 36% tax on unrealised gains from stocks, bonds, and cryptocurrencies, even if they have not sold their assets. Critics have condemned the move and the proposal has drawn nearly 50,000 signatures on a petition calling for reconsideration. Wouter Leenders, a tax expert from UC Berkeley, says that the “quite mundane tax change” has generated international attention due to its impact on crypto investors.

Deloitte plans to establish a new Europe, Middle East, and Africa (EMEA) firm in June, following a partner vote. This initiative will unite 16 firms across over 80 countries which generate combined revenues of around €20bn. The new unit will be led by Richard Houston, the current chief executive of Deloitte UK and Deloitte North South Europe. Mr Houston said the EMEA unit “uniquely strengthens our ability to invest at scale across borders to accelerate innovation in areas that matter most to our clients,” adding it “builds on our market-leading local partnerships while supporting collaboration at a regional level.”

The rise of artificial intelligence (AI) poses a significant threat to the UK’s professional services sector. While some experts believe AI could create new roles, the immediate concern is job displacement, particularly in routine tasks. Irina Pafomova, an AI consultant, warns of a potential net loss of jobs in finance, legal, and accounting roles. Gregory Thwaites from the Resolution Foundation notes that the UK may face greater impacts than countries focused on tourism or mining and emphasises the need for political leadership in managing this transition.

Young people under 30 are facing significant financial challenges, with average weekly disposable income dropping to £175, down from £195 in March 2021. A report by the Centre for Economics and Business Research (CEBR) and Asda highlights that young workers allocate nearly 70% of their income to essentials. Youth joblessness has risen to 16.1%, exacerbating the situation. Meanwhile, the report shows that the wealthiest saw their disposable income increase by 1.9% to £925. Sam Miley, head of forecasting and thought leadership at the CEBR, said: “Considerable scarring remains from the double-digit inflation of the cost of living crisis, particularly for those on the lower end of the income distribution, for whom purchasing power is yet to fully recover.”