Job vacancies in the UK are rapidly drying up
October survey data indicated a relative improvement in recruitment conditions across the UK, with temporary billings rising for the first time since June 2024, while permanent staff appointments fell at a slower pace.
The latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, shows the uptick in temp billings contrasted with a solid reduction in September.
The decline in permanent placements, though marked, was the softest recorded in 15 months. Recruiters frequently mentioned that uncertainty over the economic outlook and the upcoming government Budget continued to weigh on hiring decisions.
No jobs for a growing market
Notably, UK recruitment consultancies signalled a further marked reduction in demand for staff at the start of the fourth quarter. This was despite the rate of decline easing to the softest in three months. Data broken down by job type indicated that permanent vacancies continued to fall at a steeper rate than temporary roles.
By comparison, the number of people seeking new roles continued to rise at a historically sharp rate in October, despite growth easing for the second straight month.
Moreover, the increase in candidate numbers was among the steepest seen since late-2020, when the pandemic drove a rapid rise in the supply of labour. Steep upturns were seen for both permanent and temporary staff availability, which were in turn linked to redundancies and fewer job opportunities.
A combination of lower demand for workers and rising supply meant that pay pressures also remained weak in October. Starting salaries for permanent staff rose only marginally, with the rate of inflation lifting only slightly from September’s more than four-and-a-half year low. At the same time, temp pay was broadly stagnant following a one-year period of growth.
“Economic uncertainty continues to weigh heavy on business, but further stabilisation in the jobs market last month indicates that a Budget that builds business confidence, could be a catalyst for renewed hiring,” said Jon Holt (Group Chief Executive and UK Senior Partner KPMG).
“We know from our recent CEO Outlook that chief execs remain upbeat about their growth prospects, and the rise in temporary hiring indicates that opportunities are increasing – there just aren’t enough strong signals currently for bosses to commit to building their workforce on a more permanent basis. As we expect both interest rates and inflation to fall further in 2026, we may finally see hiring start to grow more steadily.”
