Graduates in the UK are entering the most challenging job market in over half a decade, with a sharp decline in entry-level opportunities and a growing impact from artificial intelligence, according to new data from job search platform Indeed.
Job postings aimed at recent university leavers have dropped by 33% compared to the same period last year, hitting their lowest level since 2017. The figures highlight increasing difficulty for graduates in securing their first roles amid an economic climate defined by cautious hiring, employer cost pressures, and rapid technological change.
Overall job adverts in the UK were 5% lower in mid-June compared with the end of March, reflecting wider uncertainty in the labour market. The decline coincides with the implementation of higher employer taxes and increases to the national minimum wage introduced in April. These factors have contributed to hiring freezes, especially in sectors reliant on graduate recruitment.
Unlike other major economies, the UK now stands out as the only country with fewer job vacancies than before the pandemic, setting it apart from the US and many European nations where labour demand has rebounded more strongly.
Indeed’s senior economist Jack Kennedy noted that while the broader labour market remains relatively stable, new entrants such as graduates are facing increasing difficulty accessing professional roles. He emphasised that employers appear to be retaining existing staff while limiting entry-level recruitment, a trend partly driven by the growing use of AI to automate early-career tasks.
The impact of artificial intelligence is now being felt across a wide range of white-collar jobs. Research from the Organisation for Economic Co-operation and Development (OECD) has warned that professions such as law, software development and healthcare could see significant disruption. The International Monetary Fund has estimated that up to 60% of jobs in advanced economies like the UK are exposed to AI, with half of those roles potentially negatively affected.
However, some experts argue that the evolving landscape could also create opportunities. The Tony Blair Institute has suggested that while private sector roles may be displaced by automation, new types of jobs will emerge — particularly for those able to develop digital and AI-related skills.
Technology Secretary Peter Kyle recently urged both businesses and workers to adapt quickly, highlighting the need for upskilling and proactive engagement with AI. He emphasised that embracing the technology now could ensure long-term career success, while delaying adaptation may leave some at risk of falling behind in a rapidly transforming economy.
As graduate job opportunities continue to shrink, concerns are mounting over how the UK will support its next generation of workers. With automation on the rise and labour market conditions tightening, policymakers and employers alike face growing pressure to invest in future-proof training, AI literacy, and accessible career pathways for new entrants.
