UK employers report weaker hiring but stronger pay growth in October

Britain's jobs market showed a slight dip in October, according to a survey released by the Recruitment and Employment Confederation and KPMG, just days after the Bank of England increased interest rates. For the first time in four months, hiring for permanent roles decreased, signaling potential challenges for businesses. KPMG's chief executive, Jon Holt, highlighted the impact of the Budget measures on businesses' ability to cope with external pressures and rising costs.

The survey revealed that the number of permanent staff placements dropped to 46.6, the lowest since May, and a decline from 50.9 in September. Additionally, temporary staff hiring also fell, reaching 48.9, the lowest since March. Despite a slight increase in the availability of candidates for both permanent and temporary roles, the availability for permanent roles contracted at the slowest pace since August 2024, while temporary role vacancies rose marginally.

The Bank of England's interest rate hike to 4% earlier in the week, coupled with warnings of further rate increases if tensions between the US and Iran persist, adds to concerns about the jobs market. Finance Minister John Healey's first annual budget on October 28 did little to alleviate the outlook for growth or inflation, leaving businesses to assess whether the Budget's measures will provide sufficient stability.