UK Employers Cut Hiring Amid Economic Uncertainty, Job Market Toughens


Recruitment Agencies Report Lowest Permanent Staff Hiring since 2020

British employers reduced their hiring of new permanent staff through recruitment agencies by the most since mid-2020, signaling challenges for job seekers in a tightening market.

The gauge of permanent staff hiring by the Recruitment and Employment Confederation and KPMG fell to its lowest level since June 2020 when the country was in lockdown due to the COVID-19 pandemic.

Temporary staff hiring also showed weak growth in July, partly due to workers seeking the stability of permanent roles.

Despite the slowdown in permanent placements, the jobs market remains “fairly robust,” attributed to post-pandemic normalization and lingering uncertainty.

Although starting pay for new permanent staff rose sharply, wage growth was the lowest since April 2021. Starting earnings are still high due to the shortage of skilled workers and pressures from rising living costs.

The Bank of England, concerned about high wage growth, received welcome news as indicators showed the labor market loosening.

However, official data revealed a rise in unemployment to a 16-month high of 4%. While annual wage growth remained at a record high of 7.3% in cash terms.

Separate figures from accountants BDO reflected challenges in hiring intentions and business confidence across sectors, as interest rates rose and demand weakened.

REC highlighted the highest availability of both temporary and permanent workers to fill jobs since December 2020.