Britain’s labour market weakened noticeably in June, with the number of available job seekers rising at the fastest rate since the height of the COVID-19 pandemic, according to a survey of
recruitment agencies released on Monday.
The report, from the Recruitment and Employment Confederation (REC) and accountancy firm KPMG, showed their staff availability index climbing to 66.1 in June from 63.3 in May — the highest level recorded since November 2020.
Such high levels of labour market slack have only previously been seen during the pandemic, the global financial crisis of 2008-09, and immediately after the September 11 attacks in 2001.
According to REC and KPMG, the figures reflect a period of significant uncertainty rather than a sudden economic downturn in the UK.
“Geopolitical tensions, the risk of rising costs, and expectations around new technology efficiencies are causing businesses to pause on hiring decisions,” said Jon Holt, Chief Executive of KPMG UK.
The survey is closely monitored by Bank of England policymakers, especially as they increasingly rely on alternative measures of labour market conditions due to recent issues with official data. Many analysts anticipate the Bank will cut interest rates next month.
The report also noted a slowdown in starting salaries for new hires and a drop in demand for staff — further signs of a cooling jobs market. Official figures from the Office for National Statistics, due on Thursday, are expected to show a similar easing in pay growth.
Adding to concerns, the UK economy unexpectedly shrank in May, according to data released last week.
Jon Holt added that while external risks, such as unpredictability in global trade policies, continue to weigh on business confidence, the recent release of the UK government’s industrial strategy could help provide some reassurance for future hiring plans. Photo by Phil Whitehouse, Wikimedia commons.
