UK labour market continues to falter - KPMG
By Abigail Townsend
Date: Friday 10 Oct 2025
(Sharecast News) - The UK jobs market continued to falter in September, an industry survey showed on Friday, weighed down by ongoing economic uncertainty
According to the latest UK Report on Jobs survey from KPMG and the Recruitment & Employment Confederation, there was a further decline in the recruitment of permanent staff at the end of the third quarter.
Survey participants cited lower employer confidence and cost concerns for the drop in hiring. It was, however, a softer decline than that seen in August.
The UK permanent placements index was 44.8, still well below the neutral 50.0 level but up on August's 44.2.
The availability of workers rose, meanwhile, fuelled by the drop in hiring and by redundancies.
Starting salaries also rose only "negligibly", the report found, with the rate of growth the weakest seen since the current run of pay inflation began over four years ago.
The permanent salaries index eased to 50.2 from 50.6 a month previously.
Temporary pay growth also eased.
Jon Holt, UK senior partner at KPMG, said: "With very little positive news on the economy in recent months, and lots of speculation about the Budget, it is understandable that employer are cautious with their hiring.
"Some clear signs from the chancellor that build on business confidence will hopefully support renewed hiring as we head in 2026."
Rachel Reeves is due to deliver her Budget at the end of November. She is facing a number of headwinds, including sluggish economic growth, sticky inflation and historically high interest rates alongside soaring government spending and borrowing.
She is now widely expected to put up taxes, despite manifesto pledges to the contrary.
Businesses, however, have already seen their costs rise notably this year after increases to the minimum wage and employers' National Insurance contributions came into force in April.
Neil Carberry, chief executive at REC, said: "We can hope that the jobs market and the economy may be moving towards calmer waters, but falling vacancies is a reminder that what is really needed is a shot of confidence in the wider economy to get things going.
"The economic picture is still challenging for employers, with pressures beyond their control. A genuinely pro-business, pro-growth Budget could provide much-needed relief."
The jobs report, which is compiled by S&P Global, is based on responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.
Data were collected between 11 and 24 September.
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