British employers are showing increased apprehension about the U.K.’s economic future, which is contributing to a reduction in hiring rates, according to Reuters. The data stems from an industry survey by the Recruitment and Employment Confederation (REC) which reveals that the rate at which employers hired workers through recruitment agencies last month was the fastest decline witnessed in over three years.
This downturn in the hiring of permanent staff was the most dramatic since the early days of the COVID-19 pandemic, in June 2020. Additionally, monetary spending on temporary workers saw a dip for the first time since July 2020. Despite the slowdown in hiring, starting salaries for employees have seen a slight rise.
Reuters reports that the Bank of England is grappling with the challenge of determining whether the economy is cooling sufficiently to curtail wage growth, which peaked at a record 7.8% in the three months leading up to June. The goal is to bring inflation back to its 2% target. Recent surveys indicate that employers anticipate a wage hike of 5% in the upcoming year, according to Reuters. This figure surpasses the pre-pandemic rate of 3-4%.
These current employment trends suggest a period of adjustment and recalibration as the workforce navigates the post-pandemic economic landscape.