The number of job vacancies in the UK has fallen to its lowest level in five years, new research suggests. Job openings dropped below 700,000 for the first time since January 2021. Data from job search site Adzuna showed advertised roles slid 3% in January to 695,000. Graduate job postings also fell below 10,000 for the first time since tracking began in 2016. The decline follows official figures showing UK unemployment rising to 5.2%, a five-year high. Wage growth is slowing, and young workers are increasingly struggling to find employment. Vacancies have been shrinking steadily since mid-2025. Compared with last January, advertised jobs are down 16%, and there has been a near-20% fall over the past six months. Analysts link the trend to higher national insurance contributions and the minimum wage increases introduced in the last two budgets by Chancellor Rachel Reeves. Businesses are also turning to automation and artificial intelligence tools, reducing the need to hire new staff. These changes have affected young workers the most. Unemployment among 18- to 24-year-olds rose to 14% in the final three months of 2025, the highest level in five years. Excluding the pandemic, youth unemployment is nearly 11%, raising concerns about the UK’s global position in youth employment. The drop in vacancies has been seen across the country, but London experienced the steepest monthly decline, with openings falling almost 6% in January. Competition for roles has intensified, with 2.4 applicants per vacancy, up from 2.27 in December. The most sought-after roles remain in warehouses, healthcare support, transport, labouring, and kitchen work. These sectors continue to show demand despite the overall slowdown. Andrew Hunter, co-founder of Adzuna, said that while the market is challenging, businesses are adapting. “Competition is high, but these pockets of strength suggest employers are investing where it matters. Jobseekers in early 2026 face fewer vacancies and tough competition, but wage growth shows employers are willing to pay for the right skills,” he added. Wage growth is one bright spot. Average advertised salaries rose to £43,289 in January, nearly 6% higher than last year. This growth comfortably outpaces inflation, which fell to 3% last month, offering some relief to workers navigating a tough jobs market. The continued rise in wages is particularly important for young and skilled workers who are competing for fewer positions. It suggests that companies are prioritizing attracting and retaining talent in critical roles, even as they cut overall hiring. Economic analysts warn that the decline in job vacancies could have long-term effects on workforce development. Young people entering the labour market face fewer opportunities to gain experience, which may affect future career prospects and earning potential. Despite the challenges, certain industries are proving resilient. Healthcare support and logistics roles are still in demand, showing that essential sectors are less affected by wider economic pressures. Analysts recommend that jobseekers focus on high-demand skills and flexible roles to navigate the competitive market. The trend in falling vacancies reflects broader economic uncertainty in the UK. Rising labour costs, combined with automation investments, signal a shift in hiring practices. Companies are choosing efficiency and technology over expanding teams, affecting overall employment numbers. For now, jobseekers face increased competition and fewer openings, particularly young workers. Wage growth offers some optimism, but navigating the UK jobs market in early 2026 requires adaptability, persistence, and strategic career planning.