Recruitment activity and wage growth in the UK plunged in October at the start of the final quarter due to growing uncertainty over the economic outlook, according to the latest report by KPMG and the Recruitment and Employment Confederation (REC).
The looming recession is impacting the UK jobs market, experts say, with employers hesitant to hire. This caution combined with fewer available candidates has resulted in the number of permanent placements falling for the first time in nearly two years, the report indicates.
“The economic and political uncertainty of September and October has caused employers to become more cautious in their approach to hiring than during the frenzy of earlier in the year. Decision-making timelines for permanent hires have extended, for instance,” the chief executive of the REC, Neil Carberry, said.
According to the report, starting salaries grew at the slowest rate in 18 months, and the number of people placed in jobs fell for the first time since February 2021. The worsening economic outlook has forced some employers to “reassess the recruitment plans, while candidate shortages also dampened hiring.”
This comes as the Bank of England has repeatedly urged businesses to rein in wages in order to help tackle inflation. The regulator has been lifting interest rates for months as analysts expect the UK economy will continue to fall throughout next year and possibly into 2024.
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