The UK jobs market showed signs of weakening in July 2025 as employers reported reduced hiring and slower pay growth. This downturn has been linked to concerns over increased labor and tax costs following a £26 billion ($34.9 billion) tax hike introduced by Chancellor Rachel Reeves. Hiring plans reached record lows amid fears related to the national insurance increase and broader tax measures. Official data from the Office for National Statistics indicated a drop in job vacancies by 44,000, or 5.8%, to 718,000 between May and July 2025. Despite the overall decline in employment, some reports suggest the rate of job losses may be starting to ease, indicating a potential stabilization in the labor market after the initial impact of the tax changes.