The UK labour market exhibited signs of cooling in August, marked by a slowdown in recruitment activities and a decline in job placements, as reported by a survey released by the Recruitment and Employment Confederation (REC) and KPMG on Monday.
Economists polled by Reuters generally anticipate that the BoE will delay further rate cuts until November, although financial markets are factoring in a 25% possibility of an interest rate reduction on September 19.
Official labour market data, set to be released on Tuesday, are expected to show robust employment growth alongside continued moderation in wage growth. These survey findings and upcoming official statistics are likely to be crucial in informing the BoE’s policy decisions moving forward.
The Report on Jobs highlighted that the number of permanent job placements experienced their steepest decline in five months, while the growth rate for permanent staff slowed to its lowest level in the same period, representing one of the slowest rates since early 2021. This trend indicates a cautious approach by employers, focusing on cost control amidst economic uncertainty and inflationary pressures.
Jon Holt, KPMG’s UK chief executive and senior partner, noted that business confidence remains uncertain despite the recent interest rate cut by the Bank of England (BoE). He suggested that the easing of salary increases observed last month could support further interest rate reductions when the BoE’s Monetary Policy Committee convenes to decide on future rate trajectories.
