Jobseekers rose sharply in December as demand for new hires slumped, with permanent staff placements declining for the 39th consecutive month
More and more Brits are facing unemployment . . . and Prime Minister Keir Starmer has been issued a warning. The number of people hunting for jobs surged “sharply” in December whilst demand for new staff plummeted, fresh analysis has revealed, raising alarm bells about the UK labour market’s future.
Fresh data from S&P Global’s purchasing managers’ index (PMI) showed the employment sector deteriorated further as the year drew to a close, dashing expectations of a bounce-back in job openings and recruitment patterns.
KPMG and Recruitment and Employment Confederation (REC) analysts revealed that staff appointments dropped once more in December, marking the 39th straight month of decline in permanent recruitment.
The key PMI reading for permanent placements hit 44.3, significantly beneath the neutral 50-point marker and representing the weakest performance since August. Temporary work also contracted more rapidly during the final month of 2025, as reported by City AM.
The research highlighted a “marked reduction” in employer demand whilst the pool of available candidates continued to swell rapidly due to increasing redundancies.
Job hunters also faced mounting difficulties securing new positions, experts noted.
These statistics dash hopes of the modest jobs market revival predicted by certain economists and industry groups, with Labour ministers set to face criticism for heaping additional burdens on sectors including hospitality and manufacturing.
Whilst businesses have already grappled with national insurance changes from last April, they must now navigate fresh rules brought in via the Employment Rights Bill. Firms secured a minor victory by seeing the timeframe for unfair dismissal claims extended from one day to six months, despite having to accept the removal of compensation caps on successful cases.
Other elements of the bill remain unaltered whilst some will face scrutiny through 26 consultations, with business leaders hoping to sway officials in their favour over trade union chiefs.
“The fact that the market slipped back a little in November is a reminder of the pressure employers are under,” Neil Carberry, REC chief executive, said.
“The second half of 2025 showed some signs of a long run of negative data softening, and with placements falling at a slower pace than the 2025 average in December there is some hope that we are seeing a December dip, rather than a change in the trend.
“With the Budget behind us, the government needs to set out a clear path that firms can believe in, from the industrial strategy to pragmatic approaches on the Employment Rights Act, which is worrying many firms.”
High earners in the capital haven’t been spared from the woes affecting the broader UK jobs market.
A separate study by recruitment firm Morgan McKinley revealed a 13 per cent drop in financial services roles available across London during the final quarter of last year compared to the July-September period. Brokers and administrators bore the brunt, with job numbers falling in both sectors, while fintech experienced a 50 per cent surge in recruitment year-on-year.
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