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UK jobs market loses steam in June as hiring slows

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·Finance Reporter, Yahoo Finance UK
·2-min read
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jobs Sunlight shines between two buildings as people walk through the financial district of London, Britain. Aug 24, 2018. REUTERS/Simon Dawson
Jobs: British employers slowed their hiring through recruitment agencies again in June. Photo: Simon Dawson/Reuters

The UK jobs market is losing steam as vacancies in June increased at the weakest rate in more than a year.

The slowdown is due to increased economic uncertainty, soaring costs, and a shortages of candidates, according to the UK Report on Jobs from the Recruitment and Employment Confederation (REC) and KPMG.

Efforts to attract candidates led to further increases in starting pay, according to the report.

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A survey of 400 recruitment consultancies suggested that candidate shortages continued to limit hiring activity.

Neil Carberry, REC chief executive, said the data showed the labour market was still strong but suggested that the peak of the post-pandemic hiring spree had passed.

“That pace of growth was always going to be temporary, the big question now is the effect that inflation has on pay and consumer demand over the course of the rest of the year,” he said.

“Part of the reason for unpredictability in the market is a slower economy accompanied by severe labour and skills shortages. These are already proving a constraint on growth in many firms.”

Starting salaries continued to climb last month as shortages of skilled candidates forced firms to lift their starting pay.

“The ongoing imbalance between the supply and demand for workers drove further steep increases in rates of starting pay during June.

“Though sharp and well above the series average, the rate of starting salary inflation eased to the softest since August 2021, while temp wage growth edged down to a 12-month low,” the report noted.

The availability of candidates is weak in part because of hesitancy by people to switch jobs in the face of uncertainty about the economy.

Read more: UK firms make training staff a priority amid ‘fierce’ war for talent

Claire Warnes, of KPMG, said: “The apparent buoyancy of the jobs market overall continues to mask some increasingly concerning trends.

“The fluctuations in demand for permanent and temporary workers in some sectors may be showing a sustained downward trend, as it becomes clear that current economic pressures are impacting employers’ confidence to grow.”

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