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The number of individuals seeking employment has soared at the fastest rate since 2020, signalling a growing fragility in the UK employment market.
A closely monitored survey by KPMG and the Recruitment and Employment Confederation (REC) indicates that increased redundancies and a decline in job openings have driven a significant surge in job-seekers.
This marks the 15th consecutive month of rising “staff availability”, with the latest increase being the most substantial since December 2020.
Unemployment has been on the rise in recent months, while wage growth has decelerated, prompting speculation that the Bank of England may cut interest rates this summer.
Recruiters have noted that elevated interest rates have contributed to a slowdown in the labour market.
The KPMG and REC Report on Jobs revealed that both the number of new job placements and the number of vacancies have decreased, although not as sharply as in previous months.
The report’s seasonally adjusted staff availability index, which measures the number of job-seekers, reached 62.2 in May, up from 60.4 in April. This index has been climbing since March of last year.
The increase is attributed to “a mixture of redundancies, higher unemployment, and reduced demand for staff,” the report stated.
The number of people securing permanent positions through recruiters has now declined for 20 consecutive months.
While the demand for staff, as evidenced by vacancy rates, also dropped, the decrease was described as “fractional.”
Jon Holt, Chief Executive of KPMG UK, commented on the findings, highlighting the complexities of the current labour market. He stated, “The big picture is that unemployment remains historically low, with the ease of filling vacancies returning to pre-pandemic levels.”
Holt added, “With today’s data, anticipated interest rate cuts, easing inflation, and increased consumer confidence over the summer, we can hopefully look forward to a better economic outlook for the second half of 2024.”
Recent official data indicated that the unemployment rate rose to 4.3% between January and March, up from 3.8% in the previous quarter.