Unemployment in the UK has reached its highest level since the pandemic, with a sharp increase in job seekers and a steady decline in vacancies adding pressure to an already strained labour market. Figures from the Office for National Statistics show that the unemployment rate rose to 4.7% in the three months to May 2025, with 1.67 million people out of work. This marks an increase of 124,000 compared to the same period last year and reflects a cooling economy hit by rising business costs and reduced hiring.
Vacancy rates have fallen for the 36th consecutive quarter. Between April and June 2025, the number of job openings dropped by 56,000 to 727,000, the lowest level since April 2021. The downturn has been linked to a combination of post-pandemic economic uncertainty and the April 2025 rise in employers’ National Insurance Contributions to 15%, alongside a lowered threshold. These changes have tightened budgets and made recruitment more difficult for many firms.
In the face of limited opportunities, job seekers are turning to artificial intelligence to sharpen their applications. According to student jobs board RateMyPlacement, online searches for phrases such as “how to write a CV for job application” and “writing a good cover letter” have surged by 5,000% in the past 30 days, highlighting growing demand for tools that offer a competitive advantage.
AI platforms such as ChatGPT and Gemini are being used to review CVs, refine cover letters and simulate interviews. By uploading job descriptions and asking AI tools to tailor documents accordingly, candidates aim to meet the criteria used by applicant tracking systems, which are now deployed by the vast majority of large UK employers. These systems scan applications for key words and phrases, filtering out many submissions before human eyes ever see them.
Industry voices have welcomed the rise in AI-assisted applications but warn against over-reliance. AI can identify missing skills, flag mismatched language and simulate likely interview questions, yet recruiters stress that it should be used to refine rather than replace human input. Guidance from the Civil Service, among others, encourages candidates to use AI to structure their thoughts while ensuring the final product remains personal and accurate.
Graduates are among those hardest hit, facing the most challenging job market since 2018. Many employers have paused hiring altogether or are using AI themselves to cut recruitment costs, further limiting opportunities. At the same time, job seekers are being urged to avoid using AI to write entire applications. Instead, platforms are best used for support, feedback and preparation.
The growing dependence on AI in recruitment comes as the mental health toll of unemployment becomes more apparent. Prolonged job searches are associated with rising anxiety and reduced confidence, particularly among younger applicants. Resources from organisations such as Prospects now recommend ethical and strategic use of AI to boost morale and reduce stress, while maintaining the authenticity required by employers.
As the UK labour market continues to shift, artificial intelligence may play a key role in how people apply for jobs. But its value ultimately depends on thoughtful, balanced use that highlights real-world experience rather than polished automation.