LONDON – A decline in hiring by British employers eased slightly in October, but pay growth slowed and rising redundancies led to an increase in the number of job seekers, an industry survey showed on Wednesday.
The Recruitment and Employment Confederation (REC), a trade body for recruiters, said the number of permanent job placements fell in October, but by the smallest amount since June, while businesses’ spending on temporary staff was steady.
“In many ways, the labour market is marking time, waiting for the brakes to be taken off growth by the Bank of England. While permanent hiring is now declining more softly, temporary hiring continues to pick up the slack,” REC chief executive Neil Carberry said.
Last week, the BOE kept its interest rate unchanged at a 15-year high of 5.25 per cent and said it was too soon to think about cuts. Inflation remains well above target at 6.7 per cent and is expected to return to 2 per cent only in late 2025.
Policymakers have been unsettled by official measures of wage growth that showed private-sector pay rise at an annual rate of 8 per cent in the three months to the end of August – more than double its rate before the Covid-19 pandemic.
Rapid pay growth has come despite rising unemployment and a sluggish economy, which the BOE forecasts will record zero growth in 2024, raising fears of a mismatch between job seekers’ skills and those which employers are looking for. For much of 2023, the REC survey has been weaker than official employment surveys – parts of which were suspended in October due to low response rates.
October’s REC data showed that growth in starting salaries for permanent roles was the slowest since March 2021 and below rates seen in the run-up to the pandemic.
Pay rates for temporary staff rose at the second-slowest pace since February 2021. Overall availability of staff rose at the third-fastest rate since the start of 2021.
“There were frequent reports that redundancies and subdued hiring activity had contributed to the latest increase in staff availability,” the report said. REUTERS
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