Recruitment suffered in run-up to the budget

Uncertainty around the budget led to the sharpest drop in new hiring since March, as the number of job vacancies fell for a 12th month in a row.
The number of people seeking work rose for the 20th successive month in October, according to the latest jobs survey from KPMG and the Recruitment and Employment Confederation (REC).
The survey’s permanent placement index fell to 44.1, while the temporary billings index dropped to 47.2. Anything below 50 signals a contraction in hiring.
The survey, which polled 400 recruitment and employment consultancies, found that the continued drop-off in permanent hiring was happening across the country. London recorded the smallest contraction. By contrast, the capital and the south of England generally recorded the biggest slide in temporary hiring. Demand for new hires from IT and computing businesses was especially weak.
“Uncertainty over the autumn budget saw businesses continue to put hiring plans on hold during October, leading to the steepest contraction in permanent staff appointments since March,” Jon Holt, the chief executive of KPMG UK, said. “But employers didn’t turn to temporary staff to fill gaps, with these appointments also facing their biggest reduction in seven months.”
The government unveiled £40 billion of new taxes in the budget, about £25 billion of which is due to come from an increase in employers’ national insurance contributions. Holt expects these additional taxes to “further dampen hiring” as companies look to save money.
During the pandemic’s “great resignation” when the hiring market was in overdrive, companies were offering big pay rises to either attract or retain staff.
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Now the market has quietened dramatically, with more workers seeking fewer available jobs. Permanent salary inflation fell again in October to its lowest level since 2021. Temp rates did improve from September, albeit that the rate of growth “was modest and well below the survey’s historical trend level”.
However, some respondents said that companies were willing to raise starting salaries for high-quality candidates.
Neil Carberry, chief executive of the REC, said there was “little in the pay data that suggests the Bank of England should step away from further cuts to interest rates”.