Britain’s ‘low-hire, low-fire’ jobs market stalls because it hits a 15-year low
Britain’s ‘low-hire, low-fire’ jobs market is at its weakest in 15 years according to the latest evidence of the economy’s sluggish performance under Labour.
Figures from accountants BDO showed that while many employers were holding on to staff, they were reluctant to hire or invest.
It came as a separate poll from the Recruitment and Employment Confederation (REC) showed a decline in new permanent roles had extended into the new year.
The recruitment industry body said the government must change course if it wants to avoid a further rise in unemployment – already at a post-pandemic high of 5.1 per cent.
The reports represent a further blow to Chancellor Rachel Reeves‘s claim that the economy will turn a corner this year.
Instead, tax rises, minimum wage hikes and a raft of new workers’ rights are putting the brakes on Britain’s beleaguered businesses.
Last week, the Bank of England downgraded its forecast for GDP growth this year to just 0.9 per cent and said unemployment would rise to 5.3 per cent, adding more than 70,000 to the jobs scrap heap.
BDO’s report pointed to ‘continued weakness in labour market conditions’.
The reports represent a blow to Chancellor Rachel Reeves’s claim that the economy will improve this year
Tax rises, minimum wage hikes and a raft of new workers’ rights are putting the brakes on Britain’s beleaguered businesses
Its employment index – reflecting trends such as hiring intentions and job numbers at firms – fell for a third consecutive month in January to its lowest level since March 2011.
The survey of 4,000 firms found that demand for staff was weak as employers prioritise ‘cost control and resilience’. Hopes that clarity provided by the Budget would boost the jobs market have yet to materialise, the report found.
Scott Knight, head of growth at BDO, said: ‘What we’re seeing here is a low-hire, low-fire labour market. Businesses are holding on to staff where they can, but they are reluctant to hire or invest while underlying conditions remain weak.’
Meanwhile the findings from REC pointed to a further decline in permanent placements in January while vacancies also continued to decrease.
REC chief executive Neil Carberry said: ‘The decisions firms are now making involve lots of trade-offs, such as whether to create jobs in the UK or elsewhere, or which jobs need the human touch as opposed to an automated solution.
‘A growing, inclusive economy requires high levels of employment – a focus on encouraging firms to create jobs rather than discouraging that investment is more important than ever.
‘So far, the Government has struggled to convince businesses it wants them to hire. That has to change in the decisions that are made this year if we are to avoid a continued rise in unemployment.’
