Job vacancies are falling at the fastest pace since 2020, putting pressure on the Bank to cut rates

Job vacancies are falling at the fastest pace since the height of the pandemic, according to figures that will increase pressure on the Bank of England to cut interest rates soon.

The number of vacancies fell 6.95 percent to 929,138 last month, the biggest drop since June 2020, according to job search engine Adzuna.

And this month looks set to be just as tough, with early data pointing to a further decline of between 6 and 8 percent in January, according to the report.

The figures anticipate the Bank of England’s interest rate decision on Thursday.

Interest rates are likely to remain unchanged at 5.25 percent, but signals that the labor market is tightening – while inflation is falling more sharply than expected – will fuel calls for an easing of borrowing costs.

Adzuna said competition for jobs was the highest since September 2021, with 1.68 job seekers per vacancy.

Retail, manufacturing and hospitality saw the biggest declines in advertised roles, with teaching the only gainer.

Average advertised salaries are still rising – by 0.96% to £37,577. Andrew Hunter, co-founder of Adzuna, said: ‘December’s figures show roles are down almost 7 per cent compared to November and almost 13 per cent compared to the same time in 2022. Jobs are expected to fall further before they start to pick up again. .’

Tony Wilson, director of the Institute for Employment Studies, a consultancy, said: ‘Hiring is slowing, but this data suggests there has been little or no recovery in activity in the new year.

‘Normally we would expect to see quite a strong recovery in recruitment after Christmas.’

Separate new figures from the Confederation of British Industry (CBI) show that private sector activity fell in the three months to January – and has remained flat or even fallen over the past year and a half. CBI chief economist Alpesh Paleja said: “It appears that the economy will remain stagnant at best in the short term.”