UK Job Market Shows Signs of Recovery Amid Economic Pressures

A recent survey reveals the UK's jobs market cooling in February, with slower hiring rates and rising starting salaries. The softening economy and high employment costs weigh heavily on businesses. Despite the decline, expectations of interest rate cuts bring some relief, with candidate availability increasing.

In February, the UK's job market experienced a slowdown as hiring rates diminished and starting salaries witnessed the slowest growth in four years. A survey highlighted the concerns of businesses over rising employment costs and the prevailing economic softness.

The Recruitment and Employment Confederation reported that the growth rate for starting salaries in permanent roles reached its lowest level since February 2021, even though the decrease in hiring was less severe compared to January. Jon Holt, CEO of KPMG, noted that despite a cautious hiring stance, there's optimism with potential interest rate cuts and strong economic data offering relief.

The Bank of England is poised to maintain interest rates at 4.5%, observing wage growth trends, expecting a slowdown to around 3.75% in late 2025. Separate data indicated major private employers retained a 4.0% median pay settlement, with overall pay settlements dropping to 3.5% but possibly rising due to an increase in the National Living Wage.

(With inputs from agencies.)