LONDON (Reuters) – Britain’s labour market cooled further in May as starting salaries for permanent staff rose at the weakest pace in over two years, according to a survey of recruiters on Thursday that the Bank of England watches closely.
The Recruitment and Employment Confederation (REC) said the number of permanent staff placements dropped last month at the sharpest rate since January 2021, as its gauge of demand for staff fell to a five-month low.
The survey chimed with other gauges of the labour market that show it is now clearly loosening. The latest official data showed unemployment rose to 3.9% in the three months to March, while annual wage growth held at 5.8%.
REC’s gauge of growth in starting salaries for permanent staff fell to its lowest level since April 2021, although it said this still represented “a historically sharp pace overall”.
“The jobs market remains subdued, with the latest survey results showing dampened hiring activity amid ongoing economic concerns,” said Claire Warnes, a partner at KPMG UK who sponsor the survey.
BoE policymakers will be trying to weigh up the extent to which price pressures are easing note as they try to judge how persistent inflation will be ahead of an interest rate announcement on June 22.
Most investors and economists expect the BoE to increase Bank Rate to 4.75% from 4.5%, which would be its 13th consecutive rate rise.
(Reporting by Andy Bruce; editing by David Milliken)
