(Bloomberg) — British workers received the smallest rise in starting salaries in almost three years in November as firms cut back on hiring against a bleaker economic backdrop.
A survey by the Recruitment and Employment Confederation and KPMG showed growing evidence that the labor market is loosening, with firms appointing fewer permanent staff and candidate numbers swelling.
The findings may boost hopes that the Bank of England has done enough to contain inflationary pressures coming from the labor market and may turn its attention toward cutting rates and supporting the economy.
Rate-setters have pointed to signs of a cooling jobs market as a key reason for halting its rate-hiking cycle. However, they’ve stressed the risk of inflation remaining persistent means interest rates are likely to stay at painfully high levels for an extended period.
“Employers are reining in hiring and continuing with redundancies in response to the sustained economic slowdown,” said Claire Warnes, partner at KPMG UK. “We’re seeing even more people looking for work, with candidate supply rising at the fastest pace since the initial pandemic wave three years ago, but the number of available roles falling again in November.”
The survey found that the hiring of permanent staff contracted at the second-fastest pace since June 2020, the height of the pandemic.
The supply of candidates for jobs jumped at the fastest pace since December 2020. Reduced demand for workers meant that starting-salaries rose at the slowest pace for 32 months, while vacancies for permanent staff slipped for the third month running.
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