KPMG and REC, UK Report on Jobs October 2026

Key findings

• Permanent placements and temp billings both increase marginally
• Vacancies fall at weakest rate in over two years
• Pay growth moderates

Data collected 10-24 September

Summary

Data from the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global, indicated that UK hiring activity improved slightly in September. Permanent placements rose at a pace that, though marginal, was the strongest in four years, while temporary billings increased more modestly. At the same time, demand for workers declined at the weakest rate in just over two years.

Pay pressures eased, with permanent salary growth slowing for the first time in four months and temp wage inflation slipping to the lowest since May. Staff availability continued to rise sharply amid reports of redundancies and fewer job opportunities, although overall growth was the slowest in three years.

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

Permanent placements rise for second month in a row

The KPMG/REC UK Report on Jobs survey signalled a back-to-back rise in permanent placements during September. The rate of growth picked up slightly from August and, though marginal, marked the strongest rise in four years. The upturn was supported by rising activity levels at employers and efforts to expand capacity amid improved business confidence. Temp billings also expanded in September, though growth was the least pronounced in five months.

Permanent Placements Index

Temporary Billings Index

50.0 = no-change

Permanent pay inflation softens in September

While competition for highly skilled workers continued to add upward pressure on rates of starting pay, permanent salary growth slowed for the first time in four months in September, and remained below the historical average. There were reports that cost considerations and increases in staff availability had tempered inflation. Temp pay rates likewise rose at a softer pace, with the rate of growth easing to a four-month low.

Vacancy numbers fall at softest rate since August 2024

Latest survey data indicated a further decline in overall demand for workers. However, the rate of contraction moderated to the weakest in just over two years and was only mild. Underlying data showed that both permanent and temporary vacancies declined at similarly modest rates in September. Data broken down by the private and public sectors - which are not seasonally adjusted - indicated the first improvement in demand for permanent private sector staff for over two years.

Staff availability rises at weakest pace in three years

The availability of candidates to fill roles continued to increase in September amid reports of redundancies and fewer job opportunities. Whilst sharp, the rate of expansion was the slowest in three years, driven by a softer rise in permanent candidate supply. Notably, the latter increased at the weakest rate since September 2023, while growth in temporary candidate numbers was the fastest in three months.

Regional and Sector Variations

Three of the four monitored English regions recorded higher permanent placements, led by the North of England. The South of England was the only area to see a decline.

Marked increases in temp billings were seen in the North of England and the Midlands, while a modest rise was recorded in the South of England. Meanwhile, a sharp reduction was registered in London, which ended a four-month period of growth.

Higher demand for permanent workers was recorded in half of the ten monitored job sectors during September, led by IT & Computing and Engineering. At the other end of the table, the sharpest falls in vacancies were signalled across Retail and Hotel & Catering categories.

Only the Blue Collar, IT & Computing and Nursing/Medical/Care sectors recorded growth in temp vacancies during September. Rates of decline varied across the seven other monitored job categories, with a modest fall in Engineering roles contrasting with a sharp drop in Retail jobs.

Comments

Commenting on the latest survey results, Jon Holt, Group Chief Executive and UK Senior Partner KPMG, said:

“For the second month in a row we are seeing the jobs market starting to flicker back to life, with businesses increasing their hiring across both permanent and temporary roles, and for the first time in over two years vacancies grew in the private sector.

“But this remains a fragile recovery; and in some sectors it could be seen as an employer’s market as the number of people looking for roles increases. The growing uncertainty around energy prices and higher borrowing costs also means there are still headwinds in the wider economy. Businesses will be looking to the Budget later this month for greater certainty in tax policy and a sense that the Government is willing to create the right conditions to turn this emerging confidence into investment and ultimately jobs.”

Maxine Bligh, Interim Chief Executive at the Recruitment and Employment Confederation (REC), said:

“The permanent jobs market is revving its engine, with a second successive month of growth. The last time we saw a sustained run of growth in permanent placements was between March 2021 and September 2022. If this trend continues, we could see genuine momentum building across the labour market, with both permanent and temporary hiring moving in the same direction, which is encouraging for jobseekers and the economy. The signal from the private sector is that it is ready to invest, with permanent vacancies rising for the first time in more than two years across the sector. A Budget that gets business confidence moving again is key to keeping that momentum going. The geopolitical backdrop remains challenging for government and business alike. But the Chancellor cannot seize this moment with talk of stability alone. Employers want to hear not just how we deliver stability, but how we go for growth.”