Britain’s red-hot labor market cooled last month with the supply of workers expanding at the quickest pace in 2 1/2 years, a closely-watched survey showed.
The poll of recruiters by KPMG and the Recruitment and Employment Confederation showed there were more people available to work, with firms citing redundancies and a slowdown in hiring.
The figures chime with official data that suggest inflationary pressures in the labor market might be receding, a welcome sign for policy makers at the Bank of England who are alarmed about a wage-price spiral setting in. The central bank expects unemployment to increase in the months ahead as higher interest rates slow the economy to a crawl.
“The jobs market remains subdued, with the latest survey results showing dampening hiring activity amid ongoing economic concerns,” said Claire Warnes, skills and productivity partner at KPMG UK.
The latest survey from REC will inform expectations for next week’s jobs-market figures from the Office for National Statistics. Last month’s figures showed the number of payrolled employees fell 136,000 in April, the first drop since February 2021, and another 156,000 people rejoined the jobs market.
Those figures began to reverse the experience through the pandemic, when hundreds of thousands of people dropped out of the labor market, leaving companies scrambling to find staff once lockdowns were lifted. That fueled upward pressure on wages and fears of an inflationary spiral.
The REC report showed pay pressures easing, with salaries for newly appointed staff rising at the slowest pace in over two years. It also showed:
- Growth in demand for staff slowed for the third consecutive month
- Vacancies increased at the slowest rate since December
- Permanent staff hires fell and temporary hires edged up, as companies delayed decision making amid an uncertain economic climate
