UK Job Market Shows Signs of Cooling

LONDON (Reuters) – Britain’s jobs market exhibited further signs of cooling last month, with slower pay increases as reported in a survey relevant to the Bank of England’s interest rate discussions.

The Recruitment and Employment Confederation noted that permanent hiring continued its nearly two-year downturn, though the decline was less pronounced than in previous months. Additionally, pay increases were weaker than those recorded in June.

For temporary staff, the rate of pay increases reached its lowest point in almost three and a half years, according to the REC, which conducted the survey in collaboration with accountancy firm KPMG.

Jon Holt, KPMG’s UK chief executive, commented, “Businesses may be cautious to hit go on their full recruitment and investment strategies until they have heard more from the Chancellor in her Autumn Budget,” referencing finance minister Rachel Reeves’ fiscal statement scheduled for Oct. 30.

The survey was conducted between July 11 and July 25, after the Labour Party’s July 4 election victory but prior to the BoE cutting interest rates on Aug. 1 for the first time since 2020, following a previous increase to a 16-year high.

The BoE is closely monitoring pay growth as part of its evaluation of inflationary pressures within the economy.