LONDON (Reuters) – British employers cut their job vacancies for the first time in more than two and half years in September and reduced their hiring again, a recruiters’ industry body said on Wednesday, adding to signs of a cooling in the labour market.
But the slowdown might now be bottoming out, the Recruitment and Employment Confederation (REC) said, something the Bank of England will factor into its thinking about the need for further interest rate increases to fight inflation pressures.
The contraction in vacancies represented the first fall in demand for staff since February 2021, REC said.
However, the fall was marginal and was mostly in the public sector.
Similarly, the hiring of permanent staff extended its year-long decline but was less severe than August’s sharp drop and was also smaller than July’s fall.
Spending on temporary workers returned to growth after a dipping in August for the first time since July 2020.
The BoE uses the REC’s data as a pointer for broader measures of wage growth. The central bank last month kept interest rates on hold after 14 back-to-back increases as it saw signs of a weakening in the labour market.
REC said starting salaries rose by the least in two and a half years and there were reports of strains on company budgets.
But REC Chief Executive Neil Carberry said the latest figures suggested the possibility of a recovery in hiring.
“This feels like a market that is finding the bottom of a year-long slowdown,” Carberry said. “And the relative buoyancy of the private sector is likely to be driving this more positive outlook. While vacancies are now dropping they remain robust in the private sector by comparison to the public.”
Firms in hospitality, engineering, logistics and healthcare continued to show very strong demand for staff, he said.
(Reporting by William Schomberg)