UK labor market has sunk slightly
2023.01.10 03:44
UK labor market has sunk slightly
By Kristina Sobol
Budrigannews.com – A survey of recruiters released on Tuesday found that Britain’s labor market cooled even more in December, which may alleviate some of the Bank of England’s concerns regarding the potential for longer-term inflation pressure.
The Recruitment and Employment Confederation trade body and accounting firm KPMG compiled the monthly index of vacancies last month, which decreased from 54.1 in November to 53.0, its lowest level since February 2021.
The BoE closely monitored the survey, which also revealed a decrease in wage pressures.
Similar to their average level in the few years prior to the COVID-19 pandemic, starting salaries for permanent staff and pay rates for temporary workers grew at the slowest rate since April 2021.
According to REC CEO Neil Carberry, “a slowdown in permanent placements is not unusual in December, but this one comes as part of a wider softening trend in the permanent market.”
“Recruiters tell us that firms pushing back hiring activity into January in the face of high inflation and economic uncertainty enhanced this,”
The majority of economists surveyed by Reuters predict that Britain’s economy will shrink in 2023, and business surveys indicate that price pressures will ease.
However, the Bank of England is likely to raise interest rates once more next month because it is concerned that double-digit inflation will become ingrained in the public’s psychology.
On Monday, Huw Pill, the chief economist at the central bank, stated that there was a possibility that domestically generated inflation would develop a self-sustaining momentum.
Permanent staff placements contracted at the fastest rate since January 2021, according to the REC survey.
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Carberry stated, “The overall picture is still of a robust labor market, although contraction in sectors like construction is a particular concern given its importance to the health of the economy.”
