UK jobs market sees biggest jump in people looking for work since 2020

LONDON (Reuters) - Britain's jobs market weakened again in March with the number of people looking work rising by the most in more than four years as companies laid off staff and were cautious about hiring, according to a survey published on Friday.

The Recruitment and Employment Confederation said the pace of hiring slowed, extending a run of falls in permanent placements to two and a half years although the decline was less sharp than at the start of the year.

The availability of staff grew at the fastest rate since December 2020 with redundancies and fewer job openings cited as factors behind the increase. 

However, REC chief executive Neil Carberry saw signs that the drop in hiring was easing, even as employers faced up to higher social security contributions ordered by British finance minister Rachel Reeves which came into effect this month.

"Given the substantial effects of the government’s decision to increase payroll taxes hugely, these figures were if anything slightly better than expected and suggest that there is potential in the market," Carberry said.

"A cyclical hiring upturn was always likely in 2025, but the near-term prospects for this have been made all the more uncertain by the actions of the US government in upending the global trade system," he said.

The REC survey, carried out with accountancy firm KPMG, was conducted between March 12 and March 25, before U.S. President Donald Trump's announcement of sweeping import tariffs, most of which he scaled back on April 9.

REC said its measure of pay growth for permanent hires remained subdued by historical standards despite a pick-up in March from February's four-year low. Temp wage growth improved slightly to a three-month high.

The Bank of England is monitoring inflation pressures in the jobs market as it considers when next to cut interest rates.

A separate survey published on Friday showed consumer confidence remained flat in the first quarter of 2025.

Accountancy firm Deloitte said its gauge of consumer confidence rose by a marginally 0.3 percentage points.

"Amid high levels of global uncertainty, a more cautious UK consumer is likely to constrain the ability of businesses to pass on higher wage and other costs to customers," Ian Stewart, chief economist at Deloitte, said.

"A revival in consumer spending will be dependent on the jobs market holding up and inflation pressures remaining contained," he said.

(Writing by William Schomberg; editing by Suban Abdulla)