UK hiring slowdown continues amid mixed labor signals

In May, UK businesses added fewer employees than anticipated, which marks the eighth straight month of falling labor demand. However, the latest survey of UK talent scouts suggests that the broader economic downturn may be easing.

Data from the Recruitment and Employment Confederation (REC) revealed a steeper-than-expected drop in permanent job placements last month, while spending on temporary staff saw a modest hike.

Neil Carberry, the REC’s CEO, said the stabilization of labor demand in the private sector bodes well for businesses. The UK job market has faced multiple challenges, including sluggish economic growth and rising social security costs for employers. Moreover, the 7% increase in the national minimum wage that was put in place in April 2025 has made conditions even more difficult.

UK tax authority figures support these findings, showing that May saw the sharpest decline in payroll employees in five years.