London hiring falls to lowest level in 19 months
The latest KPMG and REC, UK Report on Jobs: London survey highlighted a continued downturn in the local labour market at the midway point of the year.
Permanent placements fell at a steep rate, marking the most pronounced decline in 19 months. Additionally, the downturn in temporary
billings were sharp and the strongest since February.
Both of these measures also recorded stronger declines on the month at the UK level. Economic uncertainty, rising labour costs, and diminished client demand for staff weighed heavily on hiring activity, according to respondents.
Permanent and temporary vacancies fell further in June, signalling a challenging environment for job seekers. Meanwhile, rates of pay inflation eased, but were stronger than observed at the UK level.
Strongest fall in new permanent joiners in 19 months
Recruitment consultancies based in London recorded a third consecutive monthly fall in permanent placements in June. The rate of contraction was rapid and the most pronounced in 19 months.
Surveyed respondents linked the fall to a combination of economic uncertainty, a lack of vacancies, prolonged hiring processes and diminished client confidence. Moreover, a renewed decline in the Midlands meant that all four tracked English regions recorded a fall in permanent staff placements in June.
Temp billings fell sharply across London in June, thereby extending the current run of decrease to one-and-a-half years. After easing to a 17-month low in May, the rate of contraction quickened to the strongest since February.
Contributing factors to the latest decrease included rising hiring costs, fewer requirements for temporary staffing, and lower overall market demand.
“Ongoing geopolitical turbulence and the threat of rising costs, alongside the promise of technology efficiencies, mean companies continue to wait and see with their hiring,” said Jon Holt (Group Chief Executive and UK Senior Partner KPMG).
“But where there have been recent Government commitments, such as in housebuilding and infrastructure, we are seeing a small increase in permanent vacancies in related sectors – construction and engineering – which is encouraging,” he said.
Holt added that global headwinds will continue to impact the overall economic outlook as the country heads into the second half of 2025.
“Clear priorities set out in the Industrial and Trade Strategies and growth in the services sector should provide some of that confidence business leaders need to start planning future investments and to consider their hiring activities,” he said.
