February 2026

Executive summary

The UK labour market is contracting across almost every headline measure. Unemployment has risen to 5.2%, its highest level in nearly five years. Job postings are more than 25% below pre-pandemic levels. Payrolled employment has fallen by 184,000 over the past year. Youth unemployment has reached 16%, the highest in more than 10 years. The forward-looking indicators suggest these conditions will persist through 2026 and into 2027.

The central labour market question has shifted. For the past three years, the policy focus has been on participation: are there enough workers? The question now is whether there are enough jobs. This is a demand-side constraint, and it has direct implications for any organisation investing in employability outcomes. People we support are taking longer to convert, facing more rejection, competing against larger candidate pools, and watching roles get withdrawn mid-process. The same quality of support, applied to equally capable people, is producing slower results because the external environment has deteriorated.

We are not waiting for conditions to improve. Over recent months we have deployed new infrastructure specifically designed in response to what we are seeing with our members: Job Radar, an intelligent search agent that monitors employer career pages and specialist job boards so people spend their energy on applications rather than searching; CV Helper that provides professional-level feedback, tailoring, and career transition assessment at scale; Next Best Action, a recommendation engine that keeps people moving when the market gives them every reason to stop; and a foundation model upgrade to GPT-5.2 that materially improves the quality of career guidance Ask.Nim can provide.

Career Allies has gone borough-wide in Kingston, with 20 organisations enrolled and 50 people on the programme in the first month, building career conversation capability directly into the community organisations where people already go for support.

This briefing sets out the data, the structural drivers, what we are observing in current delivery, and what we are building in response.