April 2026

Executive summary

The UK labour market is splitting. Unemployment fell to 4.9% in the latest quarter, a surprise reversal of the recent upward trend. But vacancies dropped to 711,000; their lowest level since 2021. Payrolled employment continues to decline. Real wages are rising at just 0.2%, barely keeping pace with living costs. The headline numbers are pulling in different directions, but the underlying reality for people trying to find work has not improved.

The split runs along several lines. Public sector employment is growing while the private sector sheds jobs, particularly in retail and hospitality. Workers in existing roles are staying put while outsiders compete for fewer openings. The unemployment rate fell, but economic inactivity rose. Fewer people are actively looking, which may reflect discouragement rather than improvement. Underneath the published statistics, organisations are quietly shrinking through natural attrition: people leaving and not being replaced. No redundancy announcements, no headlines, just a steady removal of opportunities that never get advertised.

The forward outlook is uncertain. The base case is continued stagnation through 2026. The downside risk, driven by the Iran conflict, rising energy prices, and downgraded growth forecasts from the OECD, IMF and EY ITEM Club, is that inflation erodes consumer spending further and pushes the private sector into active contraction. Recovery requires de-escalation in the Gulf and restored employer confidence, neither of which is in anyone’s control.

We are continuing to scale the infrastructure that makes career support persistent, relational, and adaptable. Career Allies is now across 24 organisations in Kingston with 69 enrolments and the first certified allies complete. Job Radar remains free for everyone. We are developing the employer ability concept with partners. And we are investing in composable agent architecture so that new tools can be built quickly as conditions change. In a market where the range of plausible outcomes is widening, infrastructure that adapts across scenarios is the only design that makes sense.