The UK Job Market in 2026: where the jobs are, where they aren't, what's driving it
A primary-sourced view of UK unemployment, vacancies, sector hiring, and the policy changes (employer NI, the Employment Rights Act, business rates) actively reshaping the 2026 hiring market. Every claim on this page links to the original source.
Data as of 2026-04-21 · Period covered: December 2025 to February 2026 · Next quarterly refresh due 2026-07-15
UK headline labour market, Q2 2026
4.9%
Unemployment rate
75.0%
Employment rate
711,000
Open vacancies
1.78 million
People unemployed (16+)
The headline read
Unemployment in the UK is at 4.9%, with 1.78 million people aged 16 and over now classified as unemployed. Down on the previous quarter but up on a year ago. The total of 1.78 million people unemployed (aged 16+) is the highest the headline measure has shown since the post-pandemic recovery.
Vacancies sit at 711,000. Down 29,000 (3.9%) on the previous quarter. The lowest vacancy total since February to April 2021, signalling employers pulling back from active hiring.
On pay: regular earnings are growing at 3.6% (regular) per year. Public sector pay growth (5.2%) is now meaningfully ahead of private sector (3.2%), the largest gap since the late 1990s.
Where unemployment is hitting hardest
Headline rates mask significant regional variation. London at 7.4% is now the region with the highest unemployment in the UK, more than three times the rate in Northern Ireland.
| Region | Unemployment | Employment |
|---|---|---|
| Northern Ireland | 2.2% | 71.2% |
| South East | 3.9% | 78.6% |
| South West | 3.9% | 78.5% |
| Wales | 3.9% | 71.9% |
| East of England | 4.1% | 77.9% |
| Scotland | 4.1% | 74.0% |
| North West | 4.6% | 73.8% |
| East Midlands | 5.5% | 75.1% |
| West Midlands | 5.5% | 73.4% |
| Yorkshire and the Humber | 5.5% | 72.6% |
| North East | 6.1% | 71.3% |
| London | 7.4% | 74.3% |
What's actually driving it: three policy changes
1. Employer National Insurance rate rise
From 6 April 2025, the employer secondary National Insurance rate rose from 13.8% to 15%, and the threshold dropped from £9,100 to £5,000 a year. This materially raises the per-employee cost of hiring anyone earning above £5,000, especially in low-margin, labour-intensive sectors like hospitality and retail.
Source: HMRC, Rates and thresholds for employers 2025 to 2026
2. Jobs lost since the autumn Budget
Industry trade bodies report 164,641 jobs lost since the autumn Budget, with hospitality bearing 84,000 (45%) of the total. That's 3x worse than the OBR's original 50,000 forecast. The BRC and UKHospitality warn a further 120,000 high street jobs are at risk from the April 2026 business rates changes.
Sources: UKHospitality, hospitality jobs hit hardest · BM Magazine, hospitality job losses
3. The Employment Rights Act 2025
The Employment Rights Act 2025 received Royal Assent on 21 December 2025. Key provisions being phased in over 2026 and 2027:
- Statutory sick pay from day one of sickness, no lower earnings limit (from April 2026)
- Unfair dismissal qualifying period reduced from 2 years to 6 months (from 1 January 2027)
- Statutory cap on unfair dismissal compensation removed
- Right to guaranteed hours for zero-hours workers based on reference period (from 2027)
- New Fair Work Agency with direct enforcement powers covering pay, sick pay, holiday and minimum wage
Employers are responding to the reduced unfair dismissal qualifying period by treating probation periods more cautiously. Several major sectors are reporting longer hiring processes and increased reliance on agency or fixed-term contracts to preserve flexibility.
Where the forecasters expect this to go
Five authoritative forecasters now publish UK unemployment outlooks. They cluster between 4.3% and 5.8%, with the EY Item Club at the top end forecasting unemployment to pass 2 million next year for the first time since 2014.
| Forecaster | Forecast | As of |
|---|---|---|
| Office for Budget Responsibility | 4.3% (2026), 4.2% (2027), 4.1% (2028) | March 2026 |
| OBR (revised, post-Spring Statement) | 5.3% peak | March 2026 |
| Bank of England | 5.2% (Q1 2026), 5.3% (Q1 2027) | February 2026 |
| HM Treasury (average of independent forecasts) | 5.5% (Q4 2026), 5.3% (Q4 2027) | April 2026 |
| EY Item Club | 5.8% — over 2 million unemployed (first time since 2014) | April 2026 |
- Office for Budget Responsibility: Pre-Spring Statement projection.
- OBR (revised, post-Spring Statement): Higher unemployment is being fuelled by a much higher supply of people into the workforce coupled with cooling employer demand (PwC paraphrase of OBR).
- Bank of England: Weak hiring restricting employment growth; employers managing headcount by not replacing leavers rather than redundancies.
- HM Treasury (average of independent forecasts): Average of new forecasts from independent economists.
- EY Item Club: Chief economic adviser Matt Swannell: the biggest jolt to the jobs market since the pandemic. Approximately 250,000 additional job losses attributed to the Middle East conflict.
What the public thinks
Hard ONS data tells one story. Public perception adds another layer, and the gap between the two often drives which sectors get political attention and which pay reviews trigger uplifts. YouGov's tracker on labour market sentiment is the clearest UK signal here.
62%
of GB adults say it's difficult to find a job right now
80%
of 18-24s say the same (42% 'very difficult')
33%
of Londoners say 'very difficult' (highest region)
74%
of GB adults think nurses are underpaid
Sources: YouGov, How easy is it to find a job in the UK? (tracker, 11 May 2026) · YouGov, Who do Britons think are overpaid and underpaid? (22 August 2025) · Tracker wave 11 May 2026, n=1,809 GB adults
AI, GDP and where 2026 growth comes from
PwC's 10 UK economic predictions for 2026 (Barret Kupelian, Chief Economist) flag that AI will directly add £2 billion to UK GDP in 2026, rising to £23 billion by 2032 with deeper adoption. The UK will be the third-fastest growing G7 economy at 1.2% GDP growth, with pockets of opportunity in IT, manufacturing and creative industries. Public investment will rise by a cumulative £13 billion in 2026-27, the biggest two-year increase since the Global Financial Crisis.
£2 billion
AI direct GDP, 2026
£23 billion
AI direct GDP, 2032
1.2%
UK GDP growth, 2026
£13bn
public investment surge, 2026-27
Source: PwC, 10 UK economic predictions for 2026, October 2025
Sector by sector
The aggregate numbers conceal sharply different stories at the sector level. Five deep-dives below cover the sectors most exposed to the 2026 changes, the ones holding up best, and what the data means for applicants in each.
NHS & Healthcare
The UK NHS and healthcare jobs market in 2026
Persistent structural staffing crisis. ~6.7% of all NHS roles vacant (about 100,000 posts), with active recruitment across nursing, midwifery, allied health and GP training.
Read the deep-dive →
Tech & Digital
The UK tech and digital jobs market in 2026
Two markets in one. Entry-level pathways narrowing as AI absorbs basic coding; mid-and-senior engineers with AI skills in active, sometimes urgent demand.
Read the deep-dive →
Retail & Hospitality
The UK retail and hospitality jobs market in 2026
Hardest-hit sector by the 2025/26 cost-of-employment changes. Active contraction, but recruitment continues at the margins for shift work, supervisory and specialist roles.
Read the deep-dive →
Construction & Trades
The UK construction and trades jobs market in 2026
Acute, persistent skills shortage. Approximately 140,000 open vacancies against a retirement wave that will see 750,000 workers leave the sector by 2036. One of the most applicant-favourable markets in the UK economy.
Read the deep-dive →
Public Sector (ex-NHS)
The UK public sector (excluding NHS) jobs market in 2026
Pay growth at 5.2% per year is the highest in over a decade and the largest gap to private sector since the late 1990s. Hiring is constrained by spending pressure but continues at scale for skilled and specialist roles.
Read the deep-dive →
By cohort
The headline rate conceals very different experiences depending on age, gender, ethnicity, disability status and region. Five cohort-specific deep-dives below, drawing on the House of Commons Library briefing CBP-9366, PwC's Women in Work 2026, and the gov.uk Ethnicity Facts and Figures service.
Youth (16-24)
Youth unemployment in the UK, 2026: the 15.8% rate and what's behind it
Youth unemployment at its highest since early 2015. 713,000 people aged 16 to 24 are unemployed (15.8% rate), with subdued hiring demand the primary driver per the OBR.
Read the cohort deep-dive →
Women & Men
Women and men in the UK labour market, 2026
The UK female employment rate is 72.3% versus 77.8% for men. The participation gap is narrowing, but female unemployment is rising faster than at any point since the PwC Women in Work index began in 2011.
Read the cohort deep-dive →
Ethnic groups
UK unemployment by ethnic group, 2026: the 8.5% vs 4.3% gap
Minority ethnic groups in the UK face a 8.5% unemployment rate compared to 4.3% for White ethnic groups. The pre-pandemic narrowing of the gap has reversed in recent quarters.
Read the cohort deep-dive →
Disability
The UK disability employment gap, 2026: 29.5 percentage points
The disability employment gap is 29.5 percentage points. Disabled people's employment rate (52.8%) is rising faster than the non-disabled rate, but the gap remains wide.
Read the cohort deep-dive →
Regional deep-dive
UK unemployment by region, 2026: London 7.4%, Northern Ireland 2.2%
London at 7.4% is the highest-unemployment UK region; Northern Ireland at 2.2% is the lowest. The spread is the widest in a decade and is reshaping where jobseekers should focus search effort.
Read the cohort deep-dive →
How reliable are these figures?
Labour Force Survey data is less reliable than usual, and the three big employment data series are telling different stories.
The Office for National Statistics publishes labour market statistics using the Labour Force Survey (LFS). LFS response rates fell sharply through 2023, the ONS suspended detailed LFS releases between October 2023 and January 2024 because of quality concerns, and the figures were rebadged as official statistics in development when publication resumed in February 2024. Response rates have recovered, but the ONS continues to advise caution when assessing change over time and when analysing detailed estimates.
Three different data series are now in active use, and they are not telling the same story for the year to December 2025-February 2026: the LFS shows employment up 332,000, the PAYE Real Time Information data shows payrolled employees down 87,000, and the Workforce Jobs series shows a fall of 266,000 jobs. The Office for Budget Responsibility has judged that the LFS may have overstated recent employment growth.
The replacement Transformed Labour Force Survey (TLFS) is in development. The ONS confirmed in April 2026 that the earliest transition of headline labour market statistics to the TLFS will be in 2027 (later than previously hoped). Until then, the LFS remains the basis for most published figures, and any single-quarter movement should be read alongside the PAYE and Workforce Jobs series before drawing conclusions.
Source: House of Commons Library, UK labour market statistics briefing CBP-9366, 21 April 2026
What it means if you're applying right now
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All sources cited on this page
- ONS Labour Market Overview, April 2026
- ONS Regional Labour Market, April 2026
- HMRC, Rates and thresholds for employers 2025 to 2026
- UKHospitality, hospitality jobs hit hardest
- BM Magazine, hospitality job losses
- Acas, Employment Rights Bill summary
- House of Commons Library, UK labour market statistics briefing CBP-9366, 21 April 2026
- PwC, 10 UK economic predictions for 2026, October 2025
- OBR Economic and fiscal outlook, March 2026
- PwC, Spring Statement 2026 reaction
- Bank of England, Monetary Policy Report, February 2026
- HM Treasury, Forecasts for the UK economy, 15 April 2026
- People Management, EY Item Club forecast, 21 April 2026
- YouGov, How easy is it to find a job in the UK? (tracker, 11 May 2026)
- YouGov, Who do Britons think are overpaid and underpaid? (22 August 2025)
All claims on this page are linked to primary UK sources above. Data is current as of 2026-04-21 and reviewed quarterly. Spot something out of date? Email us.