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UK job vacancies grow at slowest pace in 18 months

·Business Reporter, Yahoo Finance UK
·2-min read
Job vacancies UK jobs: A sign that says 'Looking for Staff?' outside a recruitment shop.
Job vacancies: The latest data highlighted a slowdown in growth across the private and public sectors in August. Photo: PA

UK job vacancies increased at the slowest pace in 18 months in August amid greater economic uncertainty, rising costs, and candidate shortages, new data has shown.

Total candidate numbers also fell at a slightly softer pace, according to a UK Report on Jobs survey from KPMG and the Recruitment and Employment Confederation (REC), compiled by S&P Global.

This, combined with the increased cost of living and soaring inflation, led to further sharp increases in starting pay for both permanent and temporary staff members. Last month was the softest increase in starting salaries since June 2021.

The report also revealed that temp billings growth was the weakest seen for a year-and-a-half, since February 2021. However, the expansion in permanent placements was little-changed from July’s 17-month low.

The data was compiled from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

Read more: FTSE rises ahead of Liz Truss energy relief package and ECB meeting

“Unsurprisingly, the economic uncertainty continues to impact all aspects of business as we come to the end of summer. August’s data show an increasingly challenging jobs market, both in the sharp decline in the supply of candidates and in the slowdown in recruitment,” Claire Warnes, head of education, skills and productivity at KPMG UK, said.

“Despite these challenges, it’s vital that investment in people continues. Businesses may be better able to weather the economic storm through sustained investment in upskilling the available workforce.”

Demand for permanent staff was strongest in London and the Midlands, which helped to offset a slowdown in the South of England and a renewed fall in the North.

All four monitored English regions recorded marked increases in temp billings, with the quickest expansion seen in London.

The latest data also highlighted a slowdown in vacancy growth across the private and public sectors in August. The steepest increase in demand was for private sector employees.

Nursing and medical care topped the table of permanent staff most in demand, followed by hotels and catering. Retailers had the slowest increase in vacancies.

Read more: UK homebuyer enquiries slump as house prices continue to rise

It comes as the Bank of England (BoE) is watching for signs of price pressure in the labour market as it weighs up how much further it needs to hike interest rates to battle inflation.

Policy makers have signalled that they will keep raising rates to head off a 1970s-style wage-price spiral.

The survey results were also released ahead of new prime minister Liz Truss’ announcement for an energy bills support package for businesses and households.

Watch: How does inflation affect interest rates?