9th Jan 2026 01:17
(Alliance News) - Employers in the UK have suggested that a major bounce back in the labour market is unrealistic at the start of 2026, survey results showed Thursday.
According to an online survey of 235 employers carried out by Whitestone Insight on behalf of the Recruitment & Employment Confederation, businesses in the UK suggest that the minimum wage increase, national insurance changes, and new employment rights have weighed on the prospect of a labour market recovery.
Figures released by the Office for National Statistics in December revealed that UK unemployment rose to 5.1% in the three months to October from 5.0% in the three months to September.
Respondents from across the UK, representing businesses of different industries and sizes, were asked by Whitestone Insight if November's government budget impacted their hiring plans for 2026.
Almost 40% suggested no change to their hiring plans, while 21% plan to slightly reduce hiring and 9.8% intend to significantly reducing hiring.
However, 15% of respondents said they will slightly increase hiring and 4.5% will significantly increase recruitment.
4.7% of those questioned did not know what action they will take, and 5.5% will stop hiring altogether.
REC Chief Executive Neil Carberry said: "The story of 2025 was a job market that started and stopped without ever producing real momentum. Employers knew what they wanted to do but rising costs and unpredictable markets sapped confidence to move. The budget did too little to spark investment or ease cost pressures.
"Going into 2026, the government has the opportunity to set a different tone and deliver growth measures that convince businesses to invest, helped by fewer nasty surprises.
"The co-operative and focused approach that helped make sensible changes to the Employment Rights Act in December needs to flow through to decisions on industrial strategy, new regulations and the wider cost of doing business. After all, the government will only be successful if it can generate growth from the private sector."
The next ONS labour market report is scheduled for release on January 20.
By Elijah Dale, Alliance News senior reporter Asia-Pacific
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