The largest recruitment agencies in the UK have cautioned the Bank of England about a sharp decline in demand for permanent hires among British businesses, marking the second-highest contraction since the onset of the pandemic.
This warning comes amid increasingly challenging economic conditions in the UK. The Recruitment and Employment Confederation (REC) trade body delivered this message ahead of the central bank's upcoming decision on interest rates scheduled for December 14. According to the REC's monthly snapshot of the UK job market, produced in collaboration with KPMG, economic uncertainty and a reluctance to commit to new hires in November contributed to the decline.
The report noted that the availability of new job candidates rose at the fastest rate since December 2020. Permanent staff appointments experienced the second most rapid decrease since June 2020, a period marked by the initial economic downturn triggered by the first Covid-19 lockdown. With the economy facing heightened pressure from increased borrowing costs, it is widely anticipated that the central bank will maintain interest rates at the current level of 5.25%.
Starting salary inflation reached a 32-month low, and job vacancies declined for the second time in three months, as per the latest figures. This warning precedes the official release of job market statistics from the Office for National Statistics scheduled for Tuesday.