UK job market lost a little more steam in June, REC says

A lorry driver passes a sign on the side of his vehicle advertising jobs as he makes a delivery, in London, Britain October 13, 2021. REUTERS/Toby Melville

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LONDON, July 8 (Reuters) – British employers slowed their hiring through recruitment agencies again in June as vacancies rose at the slowest rate in more than a year, according to a survey that adds to signs that the labor market is losing some of its inflationary heat.

In a report the Bank of England will consider as it weighs its next interest rate decision, a measure of the hiring of permanent staff by KPMG accountants and the Recruitment and Employment Confederation (REC ) fell sharply to 54.8 from 59.2 in May.

It was the seventh consecutive month that it declined. Although it remained above the growth threshold of 50, it was the lowest reading in 16 months, as was the REC’s measure of hiring temporary staff.

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

“The big question now is the effect of inflation on wages and consumer demand over the rest of the year,” he said.

The BoE has said it is ready to act forcefully if it sees signs that the recent jump in inflation above 9% is creating more persistent inflation problems. But he is also worried about the loss of momentum in the British economy.

Vacancies grew at the slowest pace since March 2021, the survey found. Starting wages were the lowest since August for permanent workers and since July last year for temporary workers.

Three-month candidate availability has declined the most in three months, in part due to people’s reluctance to change jobs in the face of economic uncertainty.

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Reporting by William Schomberg, editing by Andy Bruce

Our standards: The Thomson Reuters Trust Principles.

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