LONDON: Signs of a tougher market for job seekers in the United Kingdom became evident as the number of hirings by British employers fell to the lowest since mid-2020 last month, due to concerns about the economic outlook.
The employment of new permanent staff members in the UK saw the fastest downward trend in three years, pushing the gauge to 42.4, which is the lowest after 34.3 in June 2020 amid the COVID-19 pandemic.
The Recruitment and Employment Confederation (REC) and accountants KPMG survey's measure of temporary staff hiring, which often rises when employers are cautious about the outlook, in July showed the weakest growth in nine months - partly because more workers were looking for security of permanent roles.
Neil Carberry, chief executive of REC, said the jobs market remained "fairly robust" despite the slowdown in permanent placements.
"To some extend this is normalisation as the post-pandemic boom abates, but it is also driven by uncertainty," he said.
While starting pay for new permanent staff rose sharply by pre-pandemic standards, the rate of wage growth was the lowest since April 2021, REC said.
Claire Warnes, partner of skills and productivity at KPMG UK, said competition for skilled workers and cost of living pressures were keeping starting salaries high.
Monday's survey chimed with other indicators showing the labour market is loosening, welcome news for the Bank of England which raised interest rates for the 14th meeting in a row to 5.25% last week and has been concerned about high wage growth.
Official data showed unemployment rose to 4% in the three months to May, a 16-month high, although annual wage growth remained at a record high of 7.3% in cash terms.
Separate figures from accountants BDO showed rising interest rates, tough trading conditions and weak demand hit hiring intentions and business confidence across services and manufacturing sectors.
BDO's employment index fell for the first time in six months in July and its optimism gauge declined for the first time in four months.
REC said the availability of both temporary and permanent workers to fill jobs hit the highest since December 2020.