LONDON: UK firms increased their hiring of full-time staff in August, according to a survey that’s watched closely by Bank of England (BoE) policymakers.
The Recruitment and Employment Confederation’s (REC) index tracking permanent staff appointments pointed to growth for the first time since September 2022. Recruiters said it reflected a rise in business optimism as firms are winning new contracts and taking on more work.
Employers had been leaning on temporary hires in recent months to adapt to a more volatile world.
August’s uptick in permanent hiring alongside temp recruitment suggested “confidence is beginning to return to the market”, said Jon Holt, group chief executive at KPMG UK.
The survey added to evidence that the labour market is holding up in the face of a global energy shock and elevated interest rates, ahead of the next BoE decision on Sept 17.
The BoE policymakers have so far voted to keep interest rates on hold as they weigh the risk of renewed inflation from the war in the Middle East against a weak economic backdrop.
The jobs recovery in REC’s report remains fragile. The pickup in hiring was concentrated in London and the Midlands, and permanent staff appointments continued to decline across the rest of England.
Employers refrained from adding staff amid an unpredictable economic outlook and questions over policy changes ahead of Chancellor of the Exchequer John Healey’s first budget.
Vacancies fell for a 34th month, while the pool of available workers grew, with recruiters citing redundancies, fewer openings and worries about job security.
A separate poll, published by the BoE last week, showed firms turned more optimistic about hiring in August, expecting employment to edge up over the coming year after previously forecasting a decline.
Wage growth expectations, meanwhile, held steady, suggesting second-round effects from the energy shock haven’t materialised so far.
“With the budget next month, the government has the opportunity to turn these green shoots into sustained positive momentum,” Holt said. — Bloomberg
