Hospitality Among Hardest Hit as UK Job Vacancies Fall to Five-Year Low

The UK’s licensed hospitality and pub trade is facing a deepening recruitment and retention challenge after new labour market data revealed that lower-paying sectors — including hospitality and retail — have suffered some of the steepest declines in both job openings and workforce numbers in recent months.

Official figures released by the Office for National Statistics (ONS) show that the total number of UK job vacancies dropped by 28,000, or approximately 3.9%, between February and April this year, settling at 705,000 — the lowest level recorded since April 2021. At the same time, the national unemployment rate nudged upward to 5% during the three months to March, compared with 4.9% in the preceding three-month period to February.

The ONS also reported that the number of workers on company payrolls fell by 100,000 in April alone, adding further evidence of a labour market that is cooling at pace. Economic analysts have attributed at least part of the deterioration to the early commercial impact of the ongoing conflict in the Middle East, with business confidence and hiring intentions both softening as the situation abroad continues to develop.

“Lower-paying sectors such as hospitality and retail have seen some of the largest falls in vacancies and payroll numbers, both in recent months and over the last year,” ONS director of economic statistics Liz McKeown said.

Economists noted that the combination of rising unemployment and moderating wage growth could provide the Bank of England with additional breathing room as it weighs whether further adjustments to interest rates are needed to bring inflation under control. With borrowing costs a persistent concern for pub and hospitality businesses carrying debt or pursuing investment, any pause in rate rises would be welcomed by the sector.

The ONS cautioned that some of the April payroll figures coincide with the start of the new tax year and may carry a greater degree of statistical uncertainty than in other months, with historical data suggesting such figures have sometimes been subject to above-average upward revisions in subsequent releases.

Kate Nicholls, Chair of UKHospitality, said: “The Government’s approach to balance the books on the backs of high street businesses is resulting in rising unemployment and fewer job opportunities, particularly for young people.

“The past two Budgets have inflicted more than £5 billion of additional costs onto hospitality businesses, forcing them to cut jobs, slash hours and scrap plans for new roles.

“Today’s figures are clear evidence that hospitality has been disproportionately affected, as the ONS itself calls out and we warned would be the case.

“There are dark clouds on the horizon still, as provisional data for April projects a further 100,000 job losses across the economy. This is clearly reflective of businesses responding to mammoth April cost increases, across wages and business rates.

“If the Government wants to grow the economy and get people back into work, it needs hospitality’s help. Rather than taxing jobs out of the sector, it should reduce our weighty cost burden to allow businesses to create jobs.

“That should start with a cut to VAT for hospitality and a meaningful reduction in business rates for the entire sector.”