Vacancies plummet as firms slam the breaks on hiring

JOB vacancies have fallen at the fastest rate since 2021 as employers delay or freeze hiring amid continued economic uncertainty.

Demand for UK workers declined sharply last month after the number of permanent job opportunities dropped at the quickest pace in more than three years, according to a survey by KPMG and the Recruitment and Employment Confederation (REC).

Temporary job vacancies also dropped for the first time, albeit only slightly, since the summer of 2020.

The latest sign of a cooling job market will increase pressure on the Bank of England to lower interest rates sooner rather than later.

The Bank’s Monetary Policy Committee raised borrowing costs 14 times in a row before keeping interest rates unchanged at 5.25pc last month.

The number of people recruited into permanent jobs across the UK declined in February for the 17th consecutive month. The latest drop was linked to recruitment freezes, delays around hiring decisions and fewer job vacancies as a result of the weaker economic outlook, the report found.

Budget constraints and a hiring slowdown also triggered the steepest reduction in temporary roles.

Jon Holt, chief executive and senior partner of KPMG, said that British bosses are ready to invest in their businesses and recruit new staff, but were not convinced by Jeremy Hunt’s Budget last week.

He said: “Businesses would ideally have liked a Budget that drives investment, boosts economic growth and helps productivity bounce back. While it was encouraging to see measures to increase labour supply, there was limited headroom for change.”

KPMG and REC also found that starting salaries for permanent positions increased at their slowest rate since March 2021.