UK sees ‘small burst’ in hiring in sign of growth
The UK labour market saw a “small burst” in demand for jobs in June but postings remain below levels seen last year, fresh data has found, with brutal tax rises introduced in April by Chancellor Rachel Reeves weighing on employers.
In new jobs figures published by the Recruitment and Employment Confederation (REC) and Lightcast, the number of vacancies hit 757,594 last month, with London driving the monthly rise.
The capital saw a rise of 8.1 per cent in job postings, which REC chief executive Neil Carberry described as a positive “leading indicator” for trends improving across the country.
“As businesses adjust to higher national insurance and react to growing demand, even at an anaemic level, they are returning to hiring in a steady but unspectacular way,” he said.
“The key to the labour market now is the same as it is for the wider economy: confidence.”
“We need to see delivery on the new industrial strategy and planning reforms, pragmatism and caution on the raft of new employer costs that are being proposed by ministers, and a ‘no surprises’ Budget that avoids the tax hikes on jobs that we saw last year.”
Researchers said the “small burst of hiring” was largely driven by significant increases in some sectors of the UK economy, including in demand for transport and logistic professionals.
Hiring trends suggest UK is no longer ‘fun’
Recruiters also looked to hire more train and tram drivers, which saw a 50 per cent increase compared to May, and workers in agricultural and fishing trades.
But the biggest decreases in job postings came in delivery drivers, paramedics, and writers or translators.
The drop in appetite for people working in creative industries – highlighted as a key growth sector in the government’s industrial strategy – prompted REC analysts to question: “Do we need to remember our sense of fun?”
Overall job postings in June were down by 2.6 per cent compared to last year, pointing to the impacts taxes and extra costs have had on employers’ appetite for hiring in recent months.
Recent data uncovered by accountancy firm UHY Hacker Young found that employers’ national insurance contributions (NICs) jumped to a record £34.2bn in the first three months of the year compared to £29.3bn last year, allowing Reeves to fund her extra short-term spending commitments.
“A record National Insurance bill for businesses has added very sharply to the costs of large and small employers alike,” said UHY Hacker Young partner Phil Kinzett-Evans.
“It’s not surprising that in a zero-growth economy a jump in business tax taxes drives up layoffs across the whole economy.”
“Small businesses are an integral part of UK plc. What hurts small businesses hurts employment and the wider economy.”
Think tanks and lobby groups have urged the government to stop making small businesses an “afterthought” in its economic planning.
The progressive organisation Renaissance called on policymakers to make it easier for owners to make use of research funding and develop portals for entrepreneurs to deal with administration on accounting and taxes.