Britain’s temporary staff wages surge in April, hiring rate dips: Report

REC survey data: Pay rates for temporary staff in Britain surged last month at the quickest pace in nearly a year, while employers reduced hiring at a slower rate compared to recent months, according to a survey conducted by the Recruitment and Employment Confederation (REC). 

The REC reported that permanent hiring declined by the smallest margin in 10 months, while billings for temporary staff decreased by the least since January.

Given the Bank of England's contemplation of a potential interest rate cut from their current 16-year high, the British job market has come under close scrutiny. However, low response rates to the primary official employment measure have complicated this assessment.

While the REC survey has previously depicted a subdued outlook on hiring and pay for newly employed workers, recent data indicates a potential turnaround.

REC Chief Executive Neil Carberry noted, "The critical moment in any labour market slowdown is the point at which demand starts to turn around. Today's hiring data suggests that point is close, with fewer recruitment firms reporting a drop in demand."

The strong growth in temporary pay, the fastest since June 2023, was partly attributed to April's 9.8 per cent increase in the minimum wage.

Recent official data, covering the three months ending in February, revealed an annual wage growth of approximately 6 per cent, alongside a rise in the unemployment rate to a six-month high of 4.2 per cent.

REC highlighted a major increase in candidate availability, the fastest in five months, driven in part by elevated redundancies and a general uptick in individuals seeking employment.

The influx of individuals entering the labour market is viewed positively by both the Bank of England and the British government, as they are concerned about the inflationary and fiscal implications of a sustained decline in labour force participation since the onset of the COVID-19 pandemic.

(With Reuters inputs)