The latest KPMG and Recruitment and Employment Confederation survey points to tentative improvement in the UK jobs market, with pay growth picking up and temporary vacancies rising for the first time in two years as employers favour flexible hiring over permanent staff. The findings matter because they offer early evidence that the prolonged slowdown in recruitment may be easing, even as businesses remain cautious about permanent hiring amid political and economic uncertainty and elevated labour costs. Economists cautioned, however, that some of the improvement could be a temporary blip rather than a firm turning point.

Permanent job placements stabilised in July, ending a 45-month run of decline, while temporary billings grew at their fastest pace since early 2023. Starting salary inflation reached its highest level in six months and temporary wage growth hit a 26-month high, though the rise in permanent salaries remains slower than the long-run trend. London and the Midlands saw renewed growth in permanent hiring, with the Midlands recording its fastest pace in nearly four years, while overall demand for workers fell at its softest rate in 22 months. Pantheon Macroeconomics' Rob Wood suggested the figures could partly reflect a "Burnham Bounce" and warned sentiment might ease again given renewed Middle East tensions in July.