Merryn Talks Money UK Jobs Squeeze, AI Disruption, and Diverging Rate Cuts
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Sep 19, 2025 Explore the surprising insights from Next's half-year report, highlighting falling job vacancies and rising applications. Discover how increasing labor costs are pushing businesses towards mechanisation and AI solutions. Delve into the implications of the Bank of England's rate hold versus the Fed's recent rate cut, and what these diverging monetary policies mean for economic growth and inflation. Tune in for a lively discussion on the evolving job market and the impact of technology on productivity.
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Vacancies Fall As Applications Spike
- UK vacancies have fallen sharply while applications per vacancy at Next have surged, showing growing labour market slack.
- Rising applications coincide with a 35% drop in store vacancies and 76% more applications, signalling tighter hiring dynamics.
Higher Low-Wage Costs Accelerate Automation
- Next links big rises in entry-level employment costs to mechanisation and AI adoption by firms.
- Higher wages and national insurance push firms toward automation and AI to reduce labour dependence.
Productivity Alone Won’t Solve Job Losses
- Productivity gains from mechanisation only help overall welfare if displaced workers find other employment.
- If displaced workers remain unemployed, higher productivity does not offset social and fiscal costs.
