UK companies’ hiring slows due to “persistent economic uncertainty.”

According to data that revealed “lingering uncertainty” regarding the economic outlook, British firms are slowing down hiring at the same time that the number of people looking for work is increasing.

Increases in starting salary for permanent and temporary employees were at their lowest point since April 2021, according to the Recruitment and Employment Confederation (REC) and accountants KPMG.

According to the most recent employment report from the Recruitment and Employment Confederation (REC) and KPMG, the number of applicants for open positions increased in June at the fastest rate seen since the peak of the UK’s coronavirus restrictions in December 2020.

Additionally, fewer workers were hired by recruitment firms for permanent positions, and in June, salary growth shrank to its lowest level in more than two years.

Prior to that, the UK will release labor market statistics on Tuesday, which economists anticipate will show unemployment standing at 3.8%, still close to four-decade lows. However, analysts are closely monitoring any indications of slowing growth.

According to Claire Warnes, a partner at KPMG UK, the sudden increase in candidate availability this month—the biggest in two and a half years—reflects the effects of a persistent slowdown in hiring as well as rising job losses across numerous sectors.

She claimed that due to “persisting economic uncertainty,” firms appeared to choose temporary hires over permanent positions.

According to Neil Carberry, chief executive of REC, “this is probably caused by people reacting to high inflation by speeding up their job hunt, and by some enterprises reorganizing their businesses in a period of sluggish growth.

Companies reportedly stopped hiring new employees in June due to a bleak prognosis for the UK economy, particularly since the cost of living is on the rise and there is a shortage of skilled workers, which has driven up wages.

Interest rates were significantly increased by the Bank of England, going from 0.1% in late 2021 to 5% now. As the Bank works to reduce inflation, which has remained persistently high, financial markets have already factored in additional increases in the upcoming months.

Leave a Reply

Your email address will not be published. Required fields are marked *