A new survey conducted by the Recruitment and Employment Confederation (REC) and KPMG reveals positive developments in the UK labor market. It shows an increase in labor supply and a decrease in job vacancies, indicating a potential easing of market conditions. This is good news for the Bank of England (BOE), as it has been concerned about the tight labor market’s impact on inflation.
According to the survey, the number of individuals actively seeking work has risen by 120,000 in the three months leading up to June. This marks the largest increase since the beginning of the pandemic. Several factors contributed to this surge, including the conclusion of the furlough scheme and the reopening of the economy. Additionally, the number of job vacancies has decreased by 40,000, which is the first decline observed since January.
Employers are displaying a greater sense of caution regarding the economy and their hiring plans, as highlighted in the survey. The percentage of employers intending to expand their workforce in the next three months has fallen from 34% to 28% compared to the previous quarter.
These survey findings indicate that the labor market pressures that have been a cause for concern at the BOE are gradually easing. This could potentially grant the central bank more flexibility in its endeavors to control inflation. However, it’s essential to note that the labor market remains relatively tight, and if the economy continues to grow, pressures could resurface.
Here are some of the key takeaways from the survey:
- The number of people seeking work rose by 120,000 in the three months to June, the largest increase since the start of the pandemic.
- The number of job vacancies fell by 40,000, the first decline since January.
- Employers are becoming more cautious about the outlook for the economy and hiring.
- The findings of the survey suggest that the labor market pressures that have been worrying the BOE are easing.
