UK hiring slows amid economic uncertainty, inflation
LONDON, UNITED KINGDOM — British businesses have reportedly slowed their hiring pace as the number of job seekers rises, signaling “lingering uncertainty” about the economic future.
According to the latest job report by the Recruitment and Employment Confederation (REC) and KPMG, June saw the steepest increase in candidate availability since the peak of the UK’s COVID-19 restrictions in December 2020.
Concurrently, the number of people placed in permanent roles by recruitment agencies declined, and wage growth fell to its lowest rate in over two years.
“The sharp upturn in candidate availability this month – the highest for two and a half years – is a big concern for the economy, reflecting the effects of a sustained slowdown in recruitment along with increasing job losses across many sectors,” said Claire Warnes, partner at KPMG UK.
REC CEO Neil Carberry attributed the increased job-seeking to rising inflation and job losses, causing wage growth rates to drop. Despite these trends, he emphasized that the labor market remains tight, with significant skills shortages in the accountancy, construction, teaching, and nursing sectors.
“The growth in vacancies for temps and permanent staff in hotels and catering and blue-collar jobs, and for temp positions in retail, suggests businesses anticipate that people are still prepared to spend their wages on goods and services despite the fall in their purchasing power and the wider cost of living crisis,” Carberry added.
The cost of living crisis is also affecting retirement plans. Rest Less — a provider of job listings and advice to over-50s — reported that 44% of women aged between 50 and 65 plan to continue working, potentially due to the financial strain.
This report comes as the Bank of England raised interest rates from 0.1% in late 2021 to 5% to curb stubbornly high inflation.
