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32m ago

UK Hiring Falls Again in December as Starting Pay Picks Up

Employers cite higher payroll taxes as a key reason for caution.

People walk across London Bridge in London, Britain October 31, 2019. REUTERS/Yara Nardi
Most businesses do not expect to increase hiring significantly this year
Image

Overview

  • Recruiters’ REC/KPMG survey recorded a 39th consecutive monthly decline in hiring, with permanent placements at a four-month low and the overall drop the steepest in four months.
  • Average starting salaries for permanent roles rose at the fastest pace since May, though overall pay growth remained below its long-run average.
  • Vacancies fell again while candidate availability rose sharply, indicating a loosening labor market; temporary hiring also declined.
  • Businesses pointed to the 2024 payroll tax increase and higher payroll costs, including living wage and national insurance changes, as constraints on recruitment.
  • The Bank of England is scrutinizing the mixed signals on weaker hiring and firmer starting pay as it considers the pace of further interest-rate cuts after December’s move.