- Research suggests the UK could see a net loss of 163,000 jobs this year.
- London is expected to record the biggest fall, with around 25,000 jobs at risk.
- Permanent hiring dropped sharply in April as firms turned towards temporary staff.
The UK jobs market is expected to weaken further over the rest of the year, with forecasts suggesting a net loss of around 163,000 jobs as businesses pull back on hiring and economic uncertainty continues to build.
Research from the ITEM Club pointed to a broad slowdown across sectors, with London expected to suffer the largest overall decline. The capital could lose around 25,000 jobs, particularly as retail and hospitality businesses come under pressure from weaker consumer spending and rising costs.
The latest recruitment data also suggests employers are becoming increasingly cautious about taking on permanent staff. Figures released by KPMG and the Recruitment and Employment Confederation showed permanent job placements fell at their fastest pace in three months during April.
The permanent placements index dropped to 47.5 from 49.2 in March. Any figure below 50 signals contraction in the jobs market.
Firms turn cautious as uncertainty grows
Researchers said companies were delaying hiring decisions due to rising business costs and geopolitical tensions linked to the Iran conflict. Many employers are reportedly choosing flexible staffing arrangements instead of committing to long-term recruitment.
Temporary hiring offered one of the few brighter spots in the report. Temporary billings edged up to 50.4 in April, marking the first growth in three months and the strongest reading in more than two years.
Jon Holt, group chief executive and UK senior partner at KPMG, reportedly said the small signs of recovery seen earlier in the year had been disrupted by instability linked to the Middle East conflict.
He reportedly said businesses were increasingly taking a more flexible approach to workforce planning, with temporary recruitment becoming more attractive during uncertain periods.
Despite the broader national slowdown, London and northern England recorded an increase in permanent placements, with the regional index rising to 54.9.
Vacancy numbers slide as labour market loosens
The wider picture across the labour market also appears to be softening. Staff availability continued to rise during April as redundancies increased and demand for workers weakened.
Researchers said this easing in labour market pressure was helping keep overall wage growth under control, although starting salaries still continued to rise.
The decline in job vacancies was reportedly sharper in the private sector than in the public sector, adding to concerns about slowing business confidence.
Separate figures from the Office for National Statistics showed total UK vacancies fell to 711,000 in the first quarter of the year. That marked the lowest level in almost five years and represented a quarterly fall of 3.9 per cent, or 29,000 vacancies.
Analysts said the latest figures suggest employers are preparing for a tougher economic environment in the months ahead, with businesses appearing more focused on managing costs than expanding headcount.
