UK job recruiters said demand for permanent staff slipped for a third month in December, contracting at the sharpest pace since pandemic lockdowns were in place in early 2021.
(Bloomberg) — UK job recruiters said demand for permanent staff slipped for a third month in December, contracting at the sharpest pace since pandemic lockdowns were in place in early 2021.
The Recruitment & Employment Confederation also found vacancies rose at the slowest pace since February 2021, and pay growth was the softest in 20 months.
“The jobs market looks less than rosy at the start of 2023,” said Claire Warnes, a partner in skills and productivity at KPMG UK, which helped conduct the survey. “Vacancy growth rates are trending down again this month from a historically high peak in July 2021.”
The readings from 400 job-recruitment firms point toward a softening in inflationary pressures from the labor market, which are one of the main concerns of policy makers at the Bank of England. The UK central bank has lifted its key rate nine times since December 2021 to prevent a wage-price spiral from setting in.
The REC assessment published Tuesday showed pay pressures softened at the end of last year from historically high levels. Pay for those starting new jobs and also for temporary workers grew at the slowest pace since April 2021.
REC said employers have grown more cautious about hiring and deferred some plans to take on workers until this month, suggesting that the next report the organization produces will be crucial for the outlook for the rest of the year. Strikes disrupting railways and the National Health Service are contributing to concerns about the economy slipping into recession.
“Industrial relations turmoil in many sectors, along with the scarcity of available staff in all sectors, means that wage inflation may soften only slightly in the near term,” Warnes said.
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