- Latest pulse check of London jobs market shows permanent placements and vacancies falling more sharply than the UK average.
- At the same time, availability of both permanent and temporary staff is expanding faster than the rest of the country.
- Caution over hiring sees starting salaries in the capital grow at slowest rate since February 2021, while temporary rates are falling and stand at a three-and-a-half year low.
Permanent vacancies and placements continue to fall across London, with firms reluctant to hire ahead of the Budget amid speculation that employment and business taxes will be raised. That’s according to new data published today by KPMG and the Recruitment and Employment Confederation (REC), supported by BusinessLDN.
The London labour market pulse check, compiled by S&P Global and incorporating responses from 218 recruitment consultancies in the capital, shows that permanent placements dropped again in September – with a reading of 43.7 – while permanent vacancies also fell (47.3). Both figures are below the UK average – 44.9 and 47.6 respectively. Any reading above 50 marks expansion whilst any reading below indicates contraction.
The picture is similar for temporary billings, which have contracted every month this year in the capital and have consistently fallen more sharply than the UK (42.3 in London compared to 46.9 nationally). At the same time, the readings for availability for permanent (60.0) and temporary (58.1) staff across London both stand considerably above the 50 point which marks growth.
A cooling London jobs market has led to growth in salaries for new starters in both permanent (51.5) and temporary (48.6) roles across the capital dropping to their lowest since February 2021, with both figures below the respective UK readings of 52.8 and 49.9.
Anna Purchas, KPMG London Office Senior Partner, said: “Understandably, many employers are waiting to see what the Budget brings before taking on new recruits. Whilst mirroring a national picture, the pace of deterioration in London’s job market is more stark. Permanent hires and vacancies are dropping, temporary recruitment is also falling, and candidate availability is growing. It’s clear that the Capital’s labour market needs an urgent injection of confidence. The eyes of business are firmly on the Budget for clarification on taxes and more detail about the government’s plans to grow the economy. Certainty and stability could lead more employers to decide to invest in staff.”
Neil Carberry, Chief Executive at the Recruitment & Employment Confederation, said: “Businesses are facing undeniable challenges right now and are looking to the Budget for reassurance about growth in 2025. Our surveys show a strong intention to hire and invest, but action is lagging. We hope the Chancellor takes action to unlock private sector investment in the UK, which is crucial for building confidence and long-term, sustainable growth. If we get that and the Bank reacts to cooling pay growth by cutting rates, we can look forward to more recruitment activity next year.”
Muniya Barua, Deputy Chief Executive BusinessLDN, said: “The frenzy of Budget speculation is clearly weighing on employers’ hiring intentions. With the number of people out of work in the capital at its highest level in almost three years, the Chancellor needs to do more to get private investment motoring and to get more Londoners into jobs. Confirming HS2 will reach Euston, a big push on housing investment alongside relatively low-cost growth-boosters such as bringing back tax-free shopping for international tourists and scrapping stamp duty on share transactions will all help build confidence. But an employer hike in National Insurance will do little to encourage firms to take on new staff.”
Separate data for the capital from REC’s Jobs Outlook shows that the majority (54.5%) of London-based recruiters expect permanent placements to remain stable over the coming three months, whilst 32.4% expect to see an increase and just 12.7% a decrease (0.4% don’t know). It is a similar picture for temporary agency workers, with just over half of recruiters (50.6%) expecting hiring to remain the same, 32.1% expecting to see an increase and 14.3% a decrease (3.1% don’t know).
Across sectors, over a third (34.3%) expect to see an increase in permanent placements over the next three months across health and social care. Hospitality (24.5%) and sales and retail (22.8%) are also expected to record strong hiring growth ahead of the Christmas trading period.