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Hot UK labour market gives off mixed signals in February: REC -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – Workers pass London Bridge underground and rail stations during morning rush hour, London, Britain. September 8, 2021. REUTERS/Toby Melville/Files

LONDON (Reuters – British employers increased their hiring of permanent staff by just 1% in February. This is due to a short supply of suitable candidates. But starting salaries have continued to increase rapidly as a result of a survey that was released on Thursday.

The Bank of England is worried about the overheating labour market. KPMG and the Recruitment and Employment Confederation (REC), a trade organization, reported that the index of permanent staff placements has dropped to 65.3 percent from 66.8 per month in January.

Pay pressures for permanent staff grew at the second fastest rate since 1997, when the survey was started.

Claire Warnes (KPMG UK head education, skills, and productivity) stated, “While the pace of recruitment has slowed slightly,”.

Staff shortages, and wage growth that seems to have been higher since the pandemic were part of the reasons why the BoE increased interest rates by 0.2% in February. It did so faster than the other major central banks.

The central bank believes that the pressures on the labor market will prevent inflation from falling to its target of 2%, unless borrowing costs increase further.

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