UK labor market loses more momentum in November: REC survey

LONDON  – Britain’s labor market cooled noticeably last month, with demand for staff and pay growth easing, and staff shortages became less acute, a survey showed on Thursday.

The monthly index of demand for staff from the Recruitment and Employment Confederation (REC) trade body and accountants KPMG fell in November to 54.1 from 56.7 in October, the lowest reading since February 2021.

The survey’s gauges of starting salaries and pay rates for permanent and temporary workers also fell to their lowest levels in around a year and a half. Hiring of permanent staff declined for a second month running.

The survey, watched closely by the Bank of England as leading indicator of the labor market ahead of its interest rate decision next week, matched other signs that the economy is slowing.

“This month’s data emphasises that while employers are moderately more cautious in the face of economic uncertainty, this is not yet a major slowdown in hiring,” REC chief executive Neil Carberry said.

“A flatter period in the labor market is inevitable in this current economic climate, but demand is being supported by some major underlying factors, including labor shortages and technological change,” he added.

Last month BoE Governor Andrew Bailey said Britain’s “very tight” labor market was a key reason why further interest rate increases were likely.