Hot UK labor market sends mixed signals in February: REC | Investment News
LONDON (Reuters) – Hirings of new permanent employees by British employers rose by the smallest amount for 11 months in February, reflecting a shortage of applicants, although starting salaries continued to rise rapidly, according to a published survey. Thursday.
As the Bank of England worries about an overheated labor market, trade body Recruitment and Employment Confederation (REC) and accountants KPMG said their index of permanent staff placements was fell to 65.3 in February from 66.8 in January.
But wage pressures for permanent staff have grown at the second-fastest pace since the survey began in 1997.
“While recruiting activity slowed slightly, employers across all sectors continued to hire aggressively in February,” said Claire Warnes, head of education, skills and productivity at KPMG UK.
Staff shortages and wage growth that appear higher than before the pandemic are part of the reason the BoE raised interest rates in February for the second time in two months, faster than other major central banks.
The central bank believes labor market pressures will prevent inflation from falling fully back to its 2% target unless borrowing costs rise further.
(Reporting by Andy Bruce; editing by David Milliken)
Copyright 2022 Thomson Reuters.