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UK Labour Market Softens as Candidate Supply Hits Five-Year High

Employers attribute hiring hesitation to April’s employer National Insurance rise.

A passer-by walks past a job centre in Borough, in London, Britain, December 1, 2024. REUTERS/Mina Kim/File Photo
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Overview

  • A KPMG and REC survey showed candidate availability reached its highest level since November 2020 while unemployment climbed to a four-year high of 4.6% in May.
  • Permanent placements in the UK fell at the fastest rate in 22 months as companies cut back on long-term hiring.
  • Private-sector average wage growth eased to 5.3% in June, down from 5.5% and marking its weakest pace in four months.
  • Recruitment leaders blame the “scar tissue” left by April’s £25 billion rise in employer National Insurance contributions for toned-down hiring appetite.
  • The Bank of England is widely expected to reduce interest rates next month against a backdrop of cooling labour and pay dynamics, although vacancies continue to grow in construction, logistics, engineering and healthcare.