Hiring rate declines in October in ‘end to positive news for jobs’

Hiring activity in the UK jobs market slowed in October, marking a reversal from positive trends seen in recent months, according to data from a leading industry group. The number of permanent placements dropped at the second-fastest pace this year, as employers curtailed their hiring efforts. Vacancies also declined, though the rate of decrease was the smallest in over two years.

The reduction in permanent placements and the first drop in temporary billings since March were partly attributed to rising borrowing costs due to higher interest rates and energy costs impacting firms. KPMG UK CEO Jon Holt suggested that the cost pressures could dampen hiring confidence. He noted that the Budget had prompted employers to pause hiring, leaving businesses to evaluate whether the measures introduced would provide sufficient stability to manage external pressures and higher costs.

However, some resilience in hiring was observed in London and the north of England, though Maxine Bligh, interim CEO at the REC, described the Budget as a "missed opportunity for both jobs and growth." A decline in the jobs market could potentially weaken arguments for another interest rate increase, as Bank of England policymakers highlighted signs of stabilization in inflation.

Official data revealed that vacancy levels fell below 700,000 for the first time in over five years. S&P Global data, analyzed by KPMG and REC researchers, indicated growing demand for workers in IT and computing, engineering, and construction sectors.