London suffered the steepest monthly decline, followed by the East Midlands and North West

The UK’s employment market suffered another blow as total job openings dropped to the lowest level since 2021, with London experiencing the most significant decline in available roles.

Job advertisements plunged 16 per cent year-on-year to January, falling below 700,000 for the first time since January 2021, according to job search platform Adzuna.

Labour’s employment rights act has been criticised in recent weeks for imposing additional hiring costs on British businesses, and chief financial officers at retail companies indicated they may be compelled to lay off staff as the reforms are rolled out.

The decrease in recruitment meant that 694,940 total roles were being advertised in January, as per Adzuna, marking a three per cent drop from December.

However, advertised salaries grew faster than inflation, rising six per cent from January 2025 to an average of £43,289, as reported by City AM.

London was the UK region to endure the quickest monthly drop in recruitment, with vacancies down 5.6 per cent.

The capital was closely followed by the East Midlands and North West England, where job opportunities were four per cent lower than in December.

Andrew Hunter, co-founder of Adzuna, said: “As economists point to ONS data that suggests hiring rates are levelling off, the live picture from advertised jobs tells a different story.

“Our January figures show hiring is approaching pandemic-era levels, and with graduate roles falling to a record low, this suggests the market is far from being on stable footing – yet.”

Yet Hunter identified indicators of resilience in consistent wage increases and robust labour expansion in certain sectors such as teaching and cleaning.

He said: “For jobseekers in early 2026, the market remains challenging, with fewer vacancies and intense competition, but continued wage growth suggests employers are still willing to pay for the right skills.”

Graduate vacancies dropped beneath 10,000 for the first time since Adzuna’s tracker commenced in 2016, having nearly halved year-on-year (down 45 per cent).

Youth unemployment stands at its highest level – 16.1 per cent – since 2014 and has risen above the EU average for the first time.

Entry-level positions declined four per cent annually to 197,044 vacancies.

IT remained the highest-paid sector in January, with average salaries climbing to £63,428, whilst maintenance jobs experienced the largest annual decline in pay at three per cent.