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6h ago

UK Firms Freeze Permanent Hiring Before Budget as Temp Demand Edges Up

Recruiters urge the chancellor to avoid fresh payroll tax rises after linking last year’s increase to higher unemployment.

A clothing retail shop advertises for workers in Brighton, Britain, August 15, 2023. REUTERS/Toby Melville
Lobbying for small businesses at Westminster this week, two weeks before the budget

Overview

  • The KPMG/REC Report on Jobs shows permanent placements contracting in October, with the index at 45.2 and below 50 since October 2022.
  • Demand for temporary staff rose for the first time in over a year, with the temp index at 50.2.
  • Employers are pausing recruitment ahead of the 26 November budget while they wait for clarity on tax and spending plans.
  • REC chief Neil Carberry warns against repeating last year’s payroll tax increases, which recruiters say led to more redundancies and weaker hiring.
  • ONS data show unemployment at 5.0% in Q3 and payroll employment down about 180,000 over the past year, while starting salaries for new hires hit a three‑month high that remains tepid, a gauge watched by the Bank of England.