Market Analysis

Britain's labor market saw a significant slowdown last month, with job placements dropping sharply and pay growth decelerating, according to a recruiter survey released on Monday. This data may strengthen the argument for potential interest rate cuts from the Bank of England.

The monthly Report on Jobs, published by the Recruitment and Employment Confederation and KPMG, indicated that permanent job placements experienced their steepest decline in five months.

Additionally, the growth in starting salaries for permanent staff hit a five-month low, marking one of the weakest levels since early 2021.

Jon Holt, KPMG’s UK chief executive and senior partner, noted that despite an interest rate reduction by the BoE last month, business confidence remained volatile.

"The fact that salary increases last month were the slowest since March could support further rate cuts when the Monetary Policy Committee meets to decide the future trajectory of interest rates," Holt commented.

While most economists surveyed by Reuters believe the BoE will hold off on another rate cut until November, current financial market data indicates a 25% chance of a cut on September 19.

Official labor market figures, due on Tuesday, are expected to show continued employment growth alongside a further slowdown in wage increases.

Paraphrasing text from "Reuters" all rights reserved by the original author.