Latest data shows that while August saw a softening of UK labour market conditions, staff availability for both temps and permanent workers continued to grow.
At the same time, permanent salaries rose, but at the weakest pace since March while temp rates of pay increased at the lowest pace for three and a half years.
Commenting on the latest KPMG/REC’s UK Report on Jobs, Jon Holt, Chief Executive and Senior Partner of KPMG UK, said, “While lower inflation has brought welcome stability to some sectors, and despite a first rate cut in August, monetary policy continues to be restrictive, which means that overall business confidence continues to fluctuate.
“Recent Government warnings that the UK’s economy may weaken further before improving add to the overall sense of uncertainty, affecting recruitment plans. Firms holding back from hiring led to a sharp contraction in the number of people placed into permanent roles in August amid continued decline in demand, extending the downturn in the UK’s labour market.
“The news that while salaries rose last month it was at the weakest rate since March could help make the case for more rate cuts when the Monetary Policy Committee meets to decide the future path of interest rates.
“Both employers and job seekers are still facing a challenging period that will require careful long-term planning and adaptability.”
Need help deciding between Limited or Umbrella? We are happy to help- give Sophie a call on 01442 795 100 or email sophie.lewis@dolanaccountancy.com
Neil Carberry, REC Chief Executive, added, “August is always a difficult market to judge because of the summer break, but this month’s survey supports what we have been hearing around the country – employers are still cautious. They are waiting for a clear signal that sustained demand is around the corner.
“The new government said growth was its main priority – but it needs to deliver now. A vision for a positive, prosperous Britain has to accompany the fiscal realism that is being served up right now. That is the test for the Chancellor and Prime Minister this autumn.”
“It’s clear that there is underlying momentum in our jobs market, with temp hiring and private sector vacancies essentially flat. Some regions are seeing stronger performance too – notably the North of England. Pay growth has returned to a more normal level, which should reassure the Bank that the positive signal of beginning to cut interest rates was the right call.
“Firms will welcome this – but they are concerned by the potential challenges of the government’s labour market agenda. Big changes are possible – but moving too fast and breaking things may damage business investment and opportunities for workers. That is why we are encouraging the government to work with business to design changes that employers can work within, and to reassure them that they aren’t taking risks by hiring now.
To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.
Trusted by over 1,000 contractors |