FX.co ★ UK Labor Market Conditions Soften In August: KPMG/REC Report

The UK labor market experienced a noticeable downturn in August, characterized by a significant drop in permanent job placements, reduced demand for new staff, and slowing wage growth, according to a report by S&P Global released on Monday.

The KPMG and REC, UK Report on Jobs revealed that permanent staff placements fell for the 23rd consecutive month in August. This decline was the most pronounced since March, driven by lower client demand and a scarcity of workplace vacancies. Temporary billings also saw a decline during the same period.

In terms of wage growth, the report indicated that permanent staff salaries continued to rise, a trend observed over the last three-and-a-half years. However, the pace of this growth slowed to its weakest point since March. Similarly, temporary pay growth also marked its slowest rate in three-and-a-half years.

Vacancy numbers saw a slight decline in August, marking the tenth consecutive month of reduced staff demand, affecting both permanent and temporary positions.

Conversely, staff availability showed an upward trend in August. The most significant growth was noted among temporary workers, reaching a four-month high, while the availability of permanent staff grew at the slowest rate since February.

The survey highlighted that half of the sectors reported a decrease in permanent vacancies, with IT & Computing experiencing the steepest decline. For temporary vacancies, seven sectors saw decreases, with Executive & Professional being the most affected.

KPMG Chief Executive and Senior Partner Jon Holt noted that recent government warnings about potential further weakening of the UK economy have created an overall sense of uncertainty, impacting recruitment strategies.

Holt also suggested that the deceleration in salary growth, now at its slowest pace since March, might support the argument for additional rate cuts during the upcoming Monetary Policy Committee meeting on interest rates.