UK Hiring Intentions Drop to Lowest Since COVID-19, Surveys Show

UK Hiring Intentions Drop to Lowest Since COVID-19, Surveys Show
………………….

Hiring plans among British businesses have fallen to their weakest level since the COVID-19 pandemic, while starting salaries are rising at the slowest pace in over four years, according to surveys published Monday and reported by Reuters.

The Chartered Institute of Personnel and Development (CIPD) said only 57% of private sector employers plan to hire staff in the next three months, down slightly from 58% in the previous quarter and the lowest since early 2021.

CIPD attributed the slowdown to higher employer social security contributions, an increased minimum wage, and upcoming changes to employment law that could make it harder to dismiss staff in their first two years. CIPD members expect median pay growth of 3% over the next year, unchanged for the fifth consecutive quarter.

Separately, the Recruitment and Employment Confederation (REC) reported that July saw the weakest growth in starting salaries since March 2021, while pay for temporary staff rose at the slowest rate in five months.

REC said higher payroll costs, weak confidence, and economic uncertainty, including challenges from AI adoption and global headwinds, drove a sharp drop in permanent appointments. Official jobs data due Tuesday is expected to show unemployment at 4.7%, near a four-year high.