KPMG and REC, UK report on jobs July 2026

Key findings

• Temp billings growth hits highest for over three years
• Downturn in permanent staff appointments eases notably
• Pay trends improve, but redundancies continue to push up labour supply

Data collected 11-24 June

Summary

Ongoing geopolitical uncertainty – both at home and overseas – continued to shape hiring trends across the UK in June, according to the latest KPMG and REC, UK Report on Jobs data, which are compiled by S&P Global. Notably, subdued business confidence drove a preference for short-term staff, with temp billings rising at the steepest rate in over three years. However, permanent staff appointments continued to decline, albeit at a much slower pace than in May.

Overall demand for staff weakened at a quicker rate, largely reflecting a steeper reduction in permanent job vacancies. At the same time, redundancies were widely cited again in June, which contributed to a further marked increase in candidate availability. Despite this, pay trends improved, with employers raising starting salaries and wages at quicker rates as they sought to attract and secure candidates with sought-after skills.

The report is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 UK recruitment and employment consultancies.

Temp billings growth hits highest since April 2023 and permanent placements move closer to stabilising

The latest survey data pointed to a relative improvement in hiring trends across the UK in June. The number of people placed into permanent positions fell at a marginal pace that was the softest in three months, while temp billings rose at the quickest rate since April 2023. These trends were often linked to wider economic uncertainty and cost considerations, which have driven a greater preference for short-term staff and projects among a number of businesses.

Stronger growth in rates of starting pay

UK recruitment consultancies signalled further increases in rates of starting pay for both permanent and temporary workers at the end of the second quarter. According to panellists, efforts to attract top talent had placed upward pressure on pay offers. The latest upturns in salaries and wages were the strongest seen since January, but in each case, growth remained slower than typically seen across the survey history (which began October 1997).

Slower but still sharp increase in candidate availability...

Although candidate numbers continued to rise sharply overall in June, often due to redundancies and reduced hiring activity, the latest upturn was the least pronounced in four months. Softer increases in supply were signalled for both permanent and temporary labour, as some firms noted that people were more hesitant to seek out new roles in the current economic climate.

...as demand for workers continues to weaken

The sustained rise in candidate numbers coincided with a further reduction in job opportunities in June. Total demand for staff declined at the quickest rate since January, which was predominantly driven by a steeper drop in permanent vacancies. Demand for short-term staff meanwhile fell at a marginal pace that was little-changed from May.

Regional and Sector Variations

Softer falls in permanent staff appointments were recorded in London, the South of England and the Midlands. In contrast, a renewed fall was seen in the North of England following four months of growth.

Temp billings increased across all four monitored English areas at the end of the second quarter, with the strongest increase seen in the South of England.

Nursing/Medical/Care and Engineering were the only two monitored sectors to register improvements in demand for permanent staff in June, with the former noting the steeper rate of expansion. Retail meanwhile posted the sharpest reduction in permanent vacancies.

Temp vacancies rose sharply in the Blue Collar sector and solidly for the Engineering sector in June. Of the eight other monitored areas that posted a reduction in temp staff demand, the quickest falls were seen in the Retail, Nursing/Medical/Care and Executive/Professional categories.

Comments

Commenting on the latest survey results, Lisa Fernihough, Vice Chair Advisory, KPMG UK, said:

“It’s encouraging to see some of the hiring data improve in June. Although permanent placements are still falling, the pace of decline is easing and back to a rate we were seeing before the Iran conflict put a pause on active recruitment for many companies. But the story of the past few months has been the pivot to temporary work. With chief execs still facing into global uncertainty, this preference for a flexible approach to hiring means they have been able to progress shorter term projects and investments without longer term commitments. With oil prices steadying, business leaders will be hoping that the coming months bring a period of stability and improved economic conditions where they can start to build momentum again.”

Neil Carberry, REC Chief Executive, said:

“After a long recruitment winter, these figures show truly hopeful signs. Temporary and contract work once again leads the way, as firms react to demand without yet feeling confident enough to commit to larger scale permanent hiring. Though that too looks like it may change. With a new Prime Minister coming, there is a clear message here from business. The potential for the growth the country needs is here – but not if the Government pours more uncertainty and cost onto the private sector. It’s time to back business and work in partnership, not hand down costs and regulation from on high. That’s what contributed to unworkable proposals on guaranteed hours and a National Insurance bill that has driven youth unemployment up. It’s time to change that.”