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Jobs and wages boom comes to end as recession looms – report

Recession fears have brought an end to the jobs and wages boom, according to figures produced by the Recruitment and Employment Confederation and accounting giant KPMG.

The monthly KPMG/REC Report on Jobs suggests that between October 12 and 25 the number of permanent job placements fell and starting salary inflation slipped to an 18-month low.

Temp billings also stagnated as firms started to place a freeze on recruitment.

reluctance on the part of workers to change jobs meant there was another steep drop in the supply of workers.

But while the sustained decline in candidate numbers continued to put upward pressure of starting pay, rates of salary inflation and temp pay growth fell to 18- and 17-month lows, respectively.

Claire Warnes, partner in skills and productivity at KPMG UK, said: “The looming recession is clearly impacting the UK jobs market.

“Employers’ caution in hiring combined with fewer available candidates has resulted in the number of permanent placements falling for the first time in nearly two years.

“Now more than ever, it’s essential that we focus on upskilling the workforce to support and boost economic recovery when it comes.

“The jobs market will bounce back, particularly if we invest in the skills of the workforce across all sectors of the economy.”

Neil Carberry, chief executive of the REC, said: “The economic and political uncertainty of September and October has caused employers to become more cautious in their approach to hiring than during the frenzy of earlier in the year.

“Decision-making timelines for permanent hires have extended, for instance. But vacancies and pay are still rising, temporary worker demand is high, and permanent hiring has fallen for the first time in almost two years.

“Activity, overall, is still well in advance of pre-pandemic levels. We will need to watch how this story develops over months to come, but so far this data suggests heightened employer caution, not a retreat from the market.

“It remains the case that firms in many sectors are struggling to hire, as hours worked remain below their pre-pandemic level despite record-low unemployment.”

Dan Barfoot operations manager at CMD Recruitment, which has offices in Devizes, Melksham, Calne and Bath, said: “Permanent placements have fallen to an 18 month low and the economy is certainly effecting the job market.

“It’s still a very competitive and candidate-driven market, but 2023 could see an interesting change for those looking to recruit after Christmas.”

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