KPMG and REC, UK Report on Jobs November 2026

Key findings

• Recruiters signal fresh falls in permanent placements and temp billings
• Pay growth strengthens slightly amid efforts to attract skilled workers
• Overall vacancies decline at softest pace since August 2024

Data collected 12-26 October

Summary

The number of people placed into permanent jobs across the UK fell for the first time in four months in October, according to the latest KPMG and REC, UK Report on Jobs survey, compiled by S&P Global. Uncertainty over the economic outlook and concerns over costs led employers to approach hiring decisions with more caution. Temp billings also fell after rising for six consecutive months.

Redundancies and fewer job opportunities drove a steeper rise in overall candidate availability. That said, the rate at which total vacancies fell was the slowest in over two years. On the pay front, recruiters signalled stronger increases in starting salaries and temp wages, but both rates of pay growth remained subdued in the context of historical data.

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

Solid reduction in permanent staff appointments

October's KPMG/REC UK Report on Jobs survey showed a renewed fall in recruitment activity. Permanent placements fell for the first time in four months and solidly, with panel members often noting that employers had delayed or scaled back hiring due to economic uncertainty and rising costs. At the same time, temp billings declined for the first time since March.

Permanent Placements Index

Temporary Billings Index

50.0 = no-change

Starting salary inflation improves slightly

Recruitment consultancies signalled stronger increases in starting pay for both permanent and temporary staff during October. According to panellists, efforts to attract and secure high-calibre candidates, which were often in short supply, underpinned the latest upturns in pay. That said, rates of inflation remained below their historical averages.

Demand for staff declines modestly

The seasonally adjusted Total Vacancies Index edged closer to the neutral 50.0 level in October, signalling only a modest reduction in overall demand for staff. Furthermore, the rate of decline was the softest in over two years. Permanent vacancies fell at the weakest rate since August 2024, while demand for temporary workers rose fractionally following a two-month period of contraction.

Stronger rise in staff availability

The supply of candidates rose sharply in October, with the rate of growth picking up from September's three-year low. There were widespread reports that redundancies and a lower number of job openings were central to the latest upturn in candidate numbers. Permanent staff availability rose at a quicker pace than temporary candidate numbers, with the latter expanding at one of the softest rates seen over the past three years, but still markedly overall.

Regional and Sector Variations

On a regional basis, the South of England recorded the sharpest drop in placements during October, while a solid fall was seen in the Midlands. A fractional rise was registered in the North of England, while London saw slightly stronger, but still marginal growth.

Temp billings fell across all four monitored English areas bar the North of England, which recorded slower but still marked growth. The steepest fall was seen in the South of England, though solid reductions were also seen in London and the Midlands.

Six of the ten monitored job categories recorded increased demand for permanent workers in October, led by the IT & Computing and Engineering sectors. The steepest falls in demand were meanwhile signalled for permanent Retail and Hotel & Catering staff.

Temporary vacancy trends varied by sector at the start of the fourth quarter. Of the four job categories to register higher demand for temp staff, the steepest increase was signalled for Blue Collar roles. Meanwhile, Retail saw by far the steepest reduction in short-term job opportunities.

Chief Executive and UK Senior Partner KPMG, said:

“October saw employers pull back on hiring in the month leading up to the Budget, ending a run of more positive news over recent months. Renewed geopolitical and economic uncertainty weighed on confidence, with further energy price shocks and a global bond sell-off pushing borrowing costs higher.

“Businesses will now be assessing whether the measures announced in the Budget give them enough stability to absorb the external pressures and higher costs they face. But with the Bank of England increasing interest rates and inflation set to continue rising over the coming months, there is a risk the green shoots we had been seeing in the jobs market could stall.”

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

“Today’s data breaks with a run of two months of increase in permanent placements which shows the fragility of confidence employers have to invest in their hiring. Faced with economic uncertainty at home and abroad and increased costs and risks of employment, many employers are taking a more cautious approach, signalling there is much more for government to do to give employers the confidence they need to create jobs.

“But there are still signs of the recent resilience in London and the North of England. Both recorded growth in permanent placements. And the fall in overall vacancies across the UK was the slowest in more than two years, with an increase in demand for permanent staff in sectors including IT, engineering, construction and accounting and finance.

“This Budget was a missed opportunity for both jobs and growth. With the OBR concluding that the Employment Rights Act is likely to have a negative impact on economic activity, the government missed the opportunity to reduce the risks of its guaranteed hours gamble by excluding recruitment agencies from the proposals. Businesses can absorb only so many additional employment costs before hiring slows and job creation suffers."