Labour Market Outlook

The CIPD’s quarterly Labour Market Outlook is one of the most authoritative employment indicators in the UK and provides forward-looking labour market data and analysis on employers’ recruitment, redundancy and pay intentions.

The LMO is published every February, May, August and November. Its insights help HR professionals and employers anticipate labour market movements and to adjust and prepare accordingly. It also feeds into our consultations and engagement with the UK Government and policy-makers.

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Labour Market Outlook – Summer 2026

Employers keep hiring on hold as jobs growth flatlines

Our latest Labour Market Outlook finds that UK employer confidence remains close to record lows, outside of the pandemic, and has shown no signs of recovery since spring 2025. Of the 2000+ employers surveyed, only 62% of employers plan to recruit over the next three months, with most focusing on maintaining staff levels.

Median expected basic pay awards for the next 12 months remain at 3%, however with inflation set to rise over the coming year, real pay growth is likely to fall below zero.

Reforms to zero-hours and low-hours contracts are currently being consulted under the Employment Rights Act 2025. Our survey finds almost half (45%) of employers believe the changes will be difficult to implement, with two-thirds anticipating an increase in both HR and management time and cost.

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Labour Market Outlook - Summer 2026

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The net employment balance – the difference between employers expecting there will be an increase in staff levels and those expecting there will be a decrease in the next three months – remains at a near record low this quarter at +9.

Employment intentions in the private sector are at their joint record low, outside of the pandemic, of +11.

Just 57% of employers in the private sector plan to recruit over the next three months, which is the lowest figure since we began collecting this measure in 2016 (outside of the pandemic).

	Most employers believe reforms to zero-hours and low-hours contracts will increase administration and compliance work, increasing both HR and management time and cost, with SMEs and public sector employers more likely to believe they will be difficult to implement.

	Employers plan to use more self-employed/ atypical workers and increase the number of redundancies due to the reforms to zero-hours and low-hours contracts.

	The median expected basic pay increase remains at 3% overall, and across all sectors, with real pay likely to fall in the coming months