Permanent hiring in the UK fell again in October, and the decline was the steepest since March, according to the latest KPMG and REC, UK Report on Jobs survey. The survey, compiled by S&P Global from around 400 recruitment and employment consultancies, said the fall extends a period of contraction in permanent placements that has now lasted for more than two years. Temporary billings also fell, recording their steepest reduction in seven months.

Demand for staff kept weakening. Overall vacancies fell for a twelfth successive month, and the rate of decline picked up to its steepest since the start of 2021. The survey reported falls in both permanent and temporary vacancies, with only marginal growth in Blue Collar and Engineering permanent vacancies. The steepest falls in permanent vacancies were seen in Retail and in IT & Computing.

Pay growth continued to soften. Growth in starting salaries for permanent roles fell to its lowest level since early 2021, although firms were still willing to pay more for strong candidates. Temporary pay rates rose only modestly, well below the survey's long-run trend. At the same time, the overall availability of staff rose steeply for a twentieth successive month, helped by lower demand and reports of redundancies, with the rise in temporary staff availability the sharpest since December 2020.

The slowdown was broad-based across England. The steepest fall in permanent placements was again seen in the South of England, while London recorded the smallest contraction. Temporary billings fell steeply in London and the South of England, but grew solidly in the Midlands. Recruiters linked the weaker hiring to recruitment freezes and uncertainty ahead of the late October government Budget, and KPMG's Jon Holt said some chief executives expected the Budget's tax rises to dampen hiring further as businesses absorb extra costs. REC chief executive Neil Carberry said firms needed a clear, stable growth plan to be persuaded to invest. The full findings are published in the REC's Report on Jobs release.