UK jobs market stuck in contraction as costs bite

Permanent hiring remains deep in the red despite signs the decline is slowing. The KPMG/REC permanent placements index hit 44.1 in May, still well below the 50 threshold that signals growth. Payrolled employees fell 184,000 year-on-year in December, dragging total employment to 30.2 million. The National Institute of Economic and Social Research projects unemployment averaging 5.4 percent, the highest in more than a decade, driven by a 10.6 percent spike in the cost of hiring entry-level workers after minimum wage and National Insurance changes. Companies are choosing automation over hiring and letting voluntary leavers go unreplaced. Staff availability hit its second-highest level since late 2020, meaning more people are chasing fewer jobs.