LONDON: Britain’s brief employment recovery has come to an end ahead of Chancellor of the Exchequer John Healey’s budget, according to a survey that’s closely watched by Bank of England (BoE) officials.
Employers reduced hiring for the first time in four months, the Recruitment and Employment Confederation (REC) and KPMG said in a report published last Monday.
The number of workers placed in temporary jobs posted the first decline since March, and vacancies continued to shrink.
Firms scaled back or delayed staffing decisions in October as speculation swirled that Healey was preparing to raise taxes to buttress the public finances.
In the event, he targeted banks, savers and landlords, with the pain for most put off until at least 2028.
The economy is facing more immediate pressure from inflation and the Iran war energy shock, which led the Bank of England (BoE) to raise interest rates last week for the first time in three years.
The run-up to the Oct 28 fiscal event coincided with a renewed global bond sell-off that drove up borrowing costs and a fresh spike in global oil and gas prices, piling pressure on employers.
“There is a risk the green shoots we had been seeing in the jobs market could stall,” said Jon Holt, group chief executive and UK senior partner at KPMG.
The BoE was forced into action after assessing that inflation was on course to reach 5% next year, potentially triggering damaging knock-on effects on wages and price-setting. Financial markets are betting on more rate rises over the next year.
So far, there is little evidence that higher energy costs are fuelling pay demands.
REC’s measure of starting salary inflation ticked up in October, but remains below the long-run average. — Bloomberg
