According to the latest report from KPMG and the Recruitment & Employment Confederation (REC), there was a “steep decline” in the appointment of permanent staff. The slowdown was attributed to weak business confidence, increased payroll costs, and wider challenges including “economic uncertainty, the complexities of AI adoption and global headwinds”, said Jon Holt, chief executive of KPMG.

The cooling jobs market was also reflected in pay, with growth in starting salaries slowing for a second consecutive month to its lowest level since March 2021. This aligns with recent Bank of England forecasts pointing towards slower wage growth and a future rise in unemployment.

While the jobs market in some sectors like engineering remained steady, hiring continued to drop in areas such as retail and hospitality.

Kate Shoesmith, REC deputy chief executive, commented that a recovery would require “coordinated action from government, the Bank of England and businesses”.