September 27, 2023

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Recession clouds lift over UK jobs market as hiring starts to recover

2 min read

Recession clouds are receding from the UK jobs market as companies gradually regain confidence about hiring workers following a batch of better than expected economic data since the turn of the year, new figures out today reveal.

Firms are dipping their toes back in the recruitment market, lured by household spending holding up better than expected amid the cost of living crisis, according to research by KPMG and the Recruitment and Employment Confederation (REC).

The pair’s permanent placement index – which measures how rapidly businesses are taking on new full time staff – hit 49.3 for the UK as a whole last month, a shade below the 50 point threshold that separates growth and contraction and up from 46.3 in February.

While the reading means businesses trimmed hiring for the sixth month in a row, it signals the “economy [is] performing better than was expected at the end of last year, and means it is still a good time to be looking for work, with hospitality, healthcare, accountancy and financial roles all powering ahead,” Neil Carberry, chief executive of the REC, said.

However, uncertainty over whether Britain will eventually slip into recession this year, likely caused by a combination of the Bank of England’s aggressive interest rate hikes to 4.25 per cent and higher living costs potentially chilling spending, means companies are more keen to take on temporary staff, which are easier to lay off amid an economic downturn to trim costs.

The REC and KPMG’s temp placement index scaled to 52.5, the highest in six months, with London firms leading the way – the capital’s score came in at 57.6.

London’s permanent placement index, however, was the lowest in the UK at 40.2, deep in negative territory.

Today’s new jobs market numbers are another sign that the UK economy is performing better than experts had warned just a few months ago.

Heading into 2023, the Bank of England was forecasting one of the longest recessions on record, driven by…

Business Matters

2023-04-12 03:36:01

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