…employers cite job cuts and slowdown in vacancies
The United Kingdom’s (UK) labour market continued to show signs of strain in March, as the number of jobseekers rose at the fastest pace in more than four years.
The availability of workers which includes migrants expanded at its quickest rate since December 2020, with employers citing job cuts and a slowdown in new vacancies as the main contributors.
This report is according to a new industry survey released recently by the Recruitment and Employment Confederation (REC), in partnership with KPMG.
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This report indicated a continued slowdown in recruitment, marking two and a half years of consistent decline in permanent staff appointments. While the drop in hiring persisted, the rate of decline was less severe than earlier in the year.
Despite the broader slowdown, Neil Carberry, REC’s chief executive pointed to tentative signs that the downward trend in hiring might be easing.
He noted that the jobs data appeared more resilient than anticipated, especially in light of recent fiscal changes, including an increase in payroll taxes introduced by Chancellor Rachel Reeves earlier this month.
“Considering the significant impact of the government’s decision to raise payroll taxes, these figures were arguably more positive than expected and suggest some underlying strength in the labour market,” Carberry stated.
He also mentioned that although a bounce-back in hiring had been on the cards for 2025, recent global tensions, especially actions by the US disrupting international trade, have thrown short-term prospects into doubt.
The REC’s survey, which ran from March 12 to 25, was carried out before Donald Trump announced major import tariffs, many of which were partly rolled back on April 9.
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As for pay, salaries for permanent roles stayed relatively weak compared to past trends, though there was a small lift from February’s four-year low. Wages for temporary jobs also picked up slightly, reaching the highest level in three months.
The Bank of England is now keeping a close eye on wage trends as it weighs up when to cut interest rates, with pay growth and wider inflation pressures playing a big part in that decision.
Ian Stwewart Deloitte’s chief economist, said that uncertainty around the world is making UK consumers more cautious, which could make it harder for businesses to pass on rising costs.
“Any meaningful recovery in consumer spending will hinge on the resilience of the labour market and a sustained easing of inflationary pressures,” he noted.
