Britain's jobs market cooled again in October, with permanent hiring falling for the first time in four months as employers delayed decisions amid economic uncertainty and rising costs.

The latest KPMG and Recruitment and Employment Confederation (REC) UK Report on Jobs, published on Monday 9 November, found a renewed downturn in permanent appointments after two months of modest growth. Temporary billings also fell, for the first time since March.

The survey, compiled by S&P Global from around 400 UK recruitment and employment consultancies, showed recruiters placing fewer people into permanent roles at the second-quickest pace recorded so far in 2026, after May. The permanent placements index fell to 46.6 in October, down from 50.9 in September, while the temporary billings index slipped to 48.9 from 50.9. Readings below 50 indicate a decline.

Vacancy decline at its slowest in 26 months

Despite the pullback, the fall in demand for staff was the weakest in 26 months. The total vacancies index edged up to 48.7 from 48.5 in September, with permanent vacancies falling at their slowest rate in more than two years and temporary opportunities rising slightly after a two-month decline.

Official figures cited in the report reinforced the cooling trend. The Office for National Statistics put total UK vacancies at 691,000 in the three months to September, down 5.1 per cent on a year earlier and the lowest level since early 2021 outside the pandemic.

Private sector demand was broadly positive, with permanent and temporary roles both increasing modestly. Public sector vacancies continued to decline for both permanent and short-term staff, although at slower rates than in September.

More candidates chasing fewer roles

Candidate availability expanded rapidly in October, rebounding from a three-year low. The total staff availability index reached 59.4, up from 57.2 in September, and the supply of workers has now risen for 44 consecutive months, driven by redundancies and fewer job openings.

Pay growth strengthened slightly during the month as businesses competed for scarce talent. Starting salaries for permanent staff rose at a faster pace, and average pay for temporary workers also increased more quickly, although pay inflation for both remained below the survey's long-run averages.

Jon Holt, group chief executive and UK senior partner at KPMG, said: "October saw employers pull back on hiring in the month leading up to the Budget, ending a run of more positive news over recent months." He warned there was a risk that the green shoots seen in the jobs market could stall, with the Bank of England having raised interest rates and inflation set to keep rising.

London and the north hold up

The picture varied sharply by region. London and the north of England both recorded growth in permanent placements, while the south of England saw the sharpest fall and the Midlands also declined.

Among the ten monitored job categories, demand for permanent staff increased in six, led by IT and computing and by engineering. Retail and hotel and catering suffered the steepest declines. For temporary roles, blue collar jobs showed the sharpest increase in demand, while retail saw by far the steepest fall.

Maxine Bligh, interim chief executive at the REC, pointed to the resilience in London and the north of England and said the fall in overall vacancies was the slowest in more than two years. She added that the Budget had been a missed opportunity for jobs and growth.

Data for the report was collected between 12 and 26 October, in the weeks before the Chancellor's Budget on 28 October and before the Bank of England raised Bank Rate to 4 per cent last week. The next official labour market figures from the ONS are due on 17 November.