UK labour market is on the decline

The U.K. labour market cooled noticeably last month. According to Thursday's survey, wage increases and demand have fallen, and staffing shortages have become less acute.

The monthly staff demand index from the Confederation of Recruitment and Employment (REC) and KPMG accountants fell from 56.7 to 54.1 in November. This result is considered the lowest since February 2021.

The payroll survey also fell to its lowest level in about a year and a half. Hiring declined for the second month in a row.

The Bank of England has been keeping a close eye on the survey results lately. The resulting figures have served as an indicator of the state of the labour market. Thus, in the run-up to the interest rate decision, the revealed data coincided with other signs of a slowing economy.

REC Executive Director Neil Carberry said that despite employers' caution in the face of uncertainty, a serious slowdown in hiring is not imminent. 

Carberry also explained that a period of decline in the labour market is inevitable in the current economic climate. Nevertheless, demand will be supported by certain factors, such as labour shortages and technological changes.