Business
UK jobs market records sharpest hiring drop since January
The UK jobs market weakened in April as employers reduced permanent hiring and delayed recruitment plans amid rising energy costs and weaker business confidence. Recruitment surveys showed vacancies continued falling across major sectors, while economists warned global uncertainty and higher operating costs were pushing businesses toward temporary staffing and cautious hiring decisions.
Britain’s labour market slowed in April as permanent hiring declined, vacancies continued falling and employers faced rising energy costs alongside weaker economic conditions and slowing demand.
Key Highlights
- UK permanent hiring recorded its fastest decline since January, according to REC and KPMG recruitment data.
- Businesses increased temporary staffing while delaying long-term recruitment across major sectors.
- UK vacancies declined for the 30th consecutive month despite a slower pace of contraction in April.
- Forecasts estimate Britain could lose around 163,000 jobs during 2026 amid slower economic growth.
The UK jobs market recorded its steepest fall in permanent hiring since January, as employers pulled back on recruitment amid rising energy costs and weaker business confidence, according to the latest Report on Jobs from KPMG and the Recruitment and Employment Confederation (REC).
The slowdown comes as global businesses continue to manage higher borrowing costs, volatile oil prices and weaker consumer demand. Similar hiring caution has recently been reported across parts of Europe and North America, where companies are increasingly relying on temporary workers instead of long-term hiring commitments.
Permanent Hiring Falls Again
The REC survey showed permanent placements dropped to 47.5 in April from 49.2 in March. Any reading below 50 indicates contraction. Temporary billings rose slightly to 50.4 as businesses shifted toward short-term staffing during uncertain trading conditions.
The UK jobs market has now recorded 30 consecutive months of falling vacancies, although the latest decline was the slowest in almost a year. Recruiters reported weaker demand across manufacturing, retail, hospitality and construction sectors.
Official labour market figures also showed UK job vacancies recently fell to their lowest level in nearly five years. Payroll employment declined in February and March, reflecting broader caution among employers.
Energy Prices and Trade Risks Weigh on Business
The hiring slowdown follows renewed pressure on global energy markets linked to tensions around the Strait of Hormuz, a critical oil shipping route. Higher fuel and transport costs have added pressure on businesses already facing elevated financing costs and slowing orders.
A separate Royal Institution of Chartered Surveyors survey showed UK construction activity recorded its sharpest downturn since mid-2020 during the first quarter. Developers cited rising material costs and weaker project demand.
The Bank of England recently warned that inflation risks tied to energy markets could continue affecting business investment and consumer spending during the second half of the year.
Labour Market Pressure Spreads Across Industries
Forecasts released this month estimated Britain could lose around 163,000 jobs during 2026 if economic growth remains weak. Manufacturing and retail sectors are expected to face the largest employment pressure, while public sector hiring is projected to remain relatively stable.
Economists said businesses globally are becoming more cautious about expanding payrolls as operating costs remain high and economic growth slows across major economies.
FAQs
Q1. Why is the UK jobs market slowing down in 2026?
Higher energy costs, weak consumer demand and economic uncertainty are pushing employers to delay permanent hiring decisions.
Q2. Which sectors are seeing the biggest hiring decline in Britain?
Manufacturing, retail, hospitality and construction are reporting weaker recruitment demand and falling job vacancies.
Q3. Why are companies hiring more temporary workers instead of permanent staff?
Businesses are using short-term staffing to manage costs and remain flexible during uncertain economic conditions.
Q4. How could rising oil prices affect hiring trends globally?
Higher fuel and transport costs can reduce business spending, slow investment and weaken recruitment activity across multiple industries.
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