UK job market recovers post-downturn

The decline in permanent hiring in Britain in May was the least severe in over a year, indicating a potential recovery in the recruitment market, a survey by the Recruitment and Employment Confederation (REC) revealed on Monday.

The fall in permanent hiring was the smallest in 14 months, while billings for temporary staff saw the slightest drop since January. REC Chief Executive Neil Carberry noted improvements across most key measures and suggested that employer hesitancy may be waning.

The REC survey, often more pessimistic than official data, contrasts with a reported 6 per cent annual wage growth in Q1 2024, according to Reuters. With Britain’s national election on July 4 and potential interest rate cuts from the Bank of England (BoE) on the horizon, a rebound in hiring is anticipated.

The report also highlighted a significant increase in staff availability, the highest since December 2020, driven by redundancies, higher unemployment, and reduced demand for staff.

The BoE is closely monitoring the labour market to determine the right time for cutting interest rates, which have remained high since the onset of the coronavirus pandemic over four years ago.