According to tax data published by HM Revenue & Customs, 200,000 jobs were lost in 2024. The private sector is down 1% since the end of 2023, while the public sector is showing relative resilience, albeit fragile. As for job vacancies, the situation is just as alarming: they have fallen by 12% over the year, with only 500,000 vacancies available in 2024.

These figures weigh heavily on the decisions of the Bank of England (BoE), which keeps a close eye on the state of the job market. As a result, the BoE has only cut its key rates twice this year, and seems reluctant to accelerate the pace. This monetary stance complicates the ambitions of the Labour government, which is already engaged in an economic stimulus plan.

A muddled outlook

The hotel industry is among the hardest-hit sectors, while the public sector, which has provided temporary support for employment, is poised for a new wave of cuts, with 10,000 fewer jobs in the civil service. At the same time, planned increases in taxes and the minimum wage are prompting companies to cut their workforces, pointing to a further weakening of the labor market in the months ahead.

This situation represents a serious setback for Keir Starmer, who had made economic recovery a priority. The persistence of wage growth, despite a global slowdown, continues to fuel inflationary pressures, making any rate cut by the BoE all the more complex.

The British Prime Minister thus finds himself in a delicate position, with major obstacles to overcome if he is to confirm the promises made to his voters.