Key facts
- UK hiring activity improved slightly in September, with permanent placements rising at the strongest pace in four years.
- Pay growth for permanent roles slowed for the first time in four months.
- Demand for workers declined at the weakest rate in just over two years.
- Staff availability increased at the slowest pace in three years.
- Employer confidence in the economy rose, but recruitment intentions weakened.
The UK jobs market showed signs of a fragile recovery in September, with a slight increase in hiring activity and a moderation in pay growth, according to the latest KPMG and REC, UK Report on Jobs survey. Permanent placements rose for the second consecutive month, reaching their strongest pace in four years, while temporary billings also saw a modest increase. Demand for workers, as indicated by falling vacancies, contracted at the slowest rate in over two years.
Despite the improvement in hiring, pay pressures eased. Permanent salary growth slowed for the first time in four months, and temporary wage inflation slipped to its lowest point since May. This moderation in pay was attributed to cost considerations and an increase in staff availability, which continued to rise sharply amid reports of redundancies and fewer job opportunities, though the overall growth in staff availability was the slowest in three years.
Employer confidence in the economy has seen a modest improvement, but recruitment intentions have softened. Short-term permanent hiring intentions edged down, and medium-term intentions also fell, suggesting that improved sentiment has not yet translated into a stronger commitment to hiring. The REC has called for policy measures to support employment and investment, including restoring the employers' National Insurance threshold and improving access to childcare, health, and transport.