By Christian Furness, published 20 December 2025
I’ve been watching the UK labour market closely, and frankly, I’m concerned. Unemployment is rising, open vacancies are down, early Christmas sales are underwhelming, and businesses are struggling under rules they barely understand. I have to ask: does the government really get what’s happening on the ground?
I speak with a lot of senior accounting, audit, and tax professionals day to day, and from these conversations it’s clear that economic pressures are relentless. Official data shows the UK unemployment rate climbed to around 5.1%, the highest in four years, and payroll numbers have fallen - clear signs of the labour market weakening. At the same time, the number of estimated vacancies in the UK has declined year‑on‑year and month‑to‑month, despite occasional small monthly changes, reflecting a persistent fall in job openings.
And this cooling isn’t just in the raw data. In retail, a recent Confederation of British Industry (CBI) survey signalled a sharp downturn in Christmas sales expectations, the weakest seasonal outlook in years, with retailers and wholesalers reporting significantly worse sentiment than a year ago. That consumer caution feeds directly into firms’ hiring decisions as they face muted demand.
On top of that, accounting and professional services, often seen rightly as resilient sectors, are showing stress. One of Britain’s biggest accountancy firms was reported to be cutting partner pay significantly amid falling profits, highlighting the economic squeeze even at senior levels in the profession. Meanwhile, promotions to partner across the Big Four in the UK have fallen to a five‑year low, underlining weaker demand for consulting and audit services.
Then there’s regulation. IR35 and other rules have made contracting less attractive and reduced flexible working options. We’ve already seen clear evidence that raising employers’ National Insurance has not helped; several firms have cited higher employment costs when deciding to freeze or delay recruitment. I see first‑hand how business owners feel the government doesn’t understand the pressures they’re under, and worse, shows no sign of doing so. Surely, if ever there was a time to make it easier for employers to get more people into work, it is now. Adding further obligations risks stifling hiring when businesses can least afford it.
So, should we rush a workers’ rights bill now? I would argue that while protections are important, imposing additional obligations on businesses already under strain, while unemployment rises and vacancies fall, could make things worse. From my viewpoint, the government needs to understand the pressures businesses face and strike a careful balance: making it easier to get people into work while protecting employees. Otherwise, we risk deepening economic pessimism instead of creating the security the workforce needs.
