Jobs market stalls as permanent and temporary hiring both fall

"The UK jobs market ended 2025 on a weak footing, with both permanent and temporary hiring falling in December and unemployment already sitting at a four-year high. A closely watched labour market survey by KPMG and the Recruitment and Employment Confederation (REC) shows that permanent staff placements dropped to a four-month low at the end of the year, while temporary roles also declined."

"Vacancies continued to fall and the availability of workers rose sharply, underlining a market that is loosening rather than rebounding. The figures suggest that the uncertainty created by November's Budget is still weighing heavily on employers."

""Making this a better year for hiring will require a focus on rebuilding business confidence," Carberry said. "With the Budget now behind us, firms need a clear and credible direction from government - from the industrial strategy to a more pragmatic approach to the Employment Rights Act, which is worrying many employers.""

A closely watched labour market survey by KPMG and the Recruitment and Employment Confederation (REC) shows that permanent staff placements dropped to a four-month low at the end of 2025, while temporary roles also declined. Vacancies continued to fall and the availability of workers rose sharply, indicating a loosening market rather than a rebound. Uncertainty from the November Budget has weighed on employers, while higher payroll costs, including increases to the National Living Wage and lower National Insurance thresholds, constrain hiring. Most employers do not expect meaningful hiring growth in 2026. Unemployment reached 5.1% in the final quarter, the highest in four years, and economists warn it could rise further.

Read at Business Matters