Workers walk through the Canary Wharf financial district, ahead of a Bank of England decision on interest rate changes, in London, Britain August 3, 2023. REUTERS/Toby Melville/File photo
LONDON – British employers concerned about the economic outlook last month reduced the number of workers they hired through recruitment agencies at the fastest pace in more than three years, an industry survey showed on Friday.
The Recruitment and Employment Confederation (REC), a trade body, said the hiring of permanent staff fell the most since June 2020, at the start of the COVID-19 pandemic, while spending on workers Temporary prices fell for the first time since July 2020.
“At the moment, the labor market is looser than it has been since the peak of the first lockdown,” said REC director general Neil Carberry, while adding that there are signs that the Employer confidence could improve later this year.
READ: UK jobs market is cooling again and wage growth is the weakest since April 2021, says REC
REC also reported that starting salaries increased at the slowest pace since March 2021, although this is still a significant increase by historical standards.
Friday’s figures highlight the dilemma facing the Bank of England as it tries to determine whether the economy is cooling enough to reduce wage growth – which hit a record 7.8 per cent over of the three months to June – at a level that will allow inflation to return to its highest level. 2 percent target.
A BoE survey released on Thursday showed that employers expect to raise wages by 5 percent in the coming year, above the usual rate of 3 to 4 percent before the pandemic, when inflation remained close to the target.
READ: UK businesses plan biggest pay rises since 2012 to address staff shortages
BoE Governor Andrew Bailey said on Wednesday that the BoE was close to the end of its cycle of rate hikes – which took interest rates from 0.1% to 5.25% in less than two years – but that it was too early to know if the work was done. .
One risk for the BoE is that the pandemic, Brexit and high inflation disrupt the UK labor market in ways that make wages less responsive to economic downturns, which would mean more unemployment than before is needed to bring unemployment under control. ‘inflation.
The REC said there were “widespread reports” from its members that the pool of jobseekers had been swollen by increased layoffs. The number of applicants increased in August at the second fastest rate since December 2020.
The REC surveyed around 400 recruitment agencies between August 10 and 24.
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