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last mo.

UK Hiring Slumps for 39th Month as Starting Pay Rebounds and Confidence Sours

The mixed signals leave the Bank of England weighing how quickly it can cut rates again.

Tourists gather at the General Wolfe Statue viewpoint overlooking Canary Wharf, in Greenwich Park, London, Britain, September 30, 2025. REUTERS/Corey Rudy
People walk across London Bridge in London, Britain October 31, 2019. REUTERS/Yara Nardi
Most businesses do not expect to increase hiring significantly this year
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Overview

  • Permanent placements fell for a 39th straight month in December, the steepest drop in four months, with vacancies down and candidate availability rising sharply.
  • Starting salaries for permanent roles rose at the fastest pace since May, though overall pay growth remained below its long‑run average.
  • Business confidence weakened further, with BDO’s optimism index at its lowest since January 2021 and ICAEW’s gauge at a three‑year low following the November budget.
  • Employers point to higher employer NICs, successive minimum wage increases and regulatory changes as key reasons for pausing recruitment and shifting toward temporary staff.
  • ONS figures show unemployment at 5.1% in the fourth quarter of 2025, reinforcing signs of a cooling labour market under pressure from higher costs and weak demand.