'Weak conditions' | Labour market stuck in 'low-hire, low-fire' limbo as firms hold back on recruitment

UK businesses are continuing to hold back on hiring as economic uncertainty weighs on workforce decisions, according to a new business trends report.

The latest Employment Index from accountancy and advisory firm BDO – which tracks hiring intentions, headcount trends and labour demand rather than the total number of people in work – fell for the third consecutive month in January to 93.30. That marks its weakest reading since March 2011.

The decline follows a year in which the index repeatedly hit multi-year lows, underlining the extent to which employers have remained cautious about expanding their workforce.

Hiring demand remains subdued

The weakness in labour market conditions reflects a broader trend of employers focusing on cost control and resilience rather than recruitment.