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UK labour market shows more signs recovery in September, KPMG/REC survey shows - Finance news and analysis from Global Banking & Finance Review
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UK labour market shows more signs recovery in September, KPMG/REC survey shows

Published by Global Banking & Finance Review

Posted on October 7, 2026

2 min read

· Last updated: October 7, 2026

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KPMG/REC Survey: UK Labour Market Recovery Accelerates in September

UK Labour Market Shows Signs of Recovery

Oct 8 (Reuters) - Britain's labour market showed more signs of recovering last month from its protracted slowdown, with permanent staff placements rising at the fastest pace in four years, a survey of recruitment firms showed on Thursday.

The survey from accountants KPMG and the Recruitment and Employment Confederation trade body added to signs of resilience in the British economy, which grew by more than expected during the first of the year.

Expert Commentary on Labour Market Trends

"For the second month in a row we are seeing the jobs market starting to flicker back to life, with businesses increasing their hiring across both permanent and temporary roles," said Jon Holt, KPMG group chief executive.

Key Findings from the REC/KPMG Report on Jobs

Permanent Placements and Salary Trends

• The index of permanent placements rose to 50.9 from 50.5 in August, the highest reading since September 2022, with readings above 50 denoting growth

• Permanent starting salaries increased but at a slower pace than in August — something that may offer tentative reassurance to Bank of England officials who are trying to gauge the extent of domestic inflation pressure

Staff Demand and Sector Performance

• Demand for staff contracted but at the weakest pace since August 2024, the survey showed

• Recruiters reported the highest demand for IT and computing, and engineering jobs, chiming with official economic growth data that point to a AI-related upswing in activity

• Retail and hospitality sectors showed the sharpest falls in demand

Labour Market Indicators and Economic Implications

• The Report on Jobs is viewed as a leading indicator of Britain's labour market

Interest Rates and Inflation Concerns

• Some BoE interest rate-setters had thought a cooling labour market will help to prevent high inflation becoming entrenched as energy prices rise, stoked by the US-Iran war

(Reporting by Andy Bruce; editing by Suban Abdulla)

Key Takeaways

  • Permanent placements index rose to 50.9 in September, the fastest growth in nearly four years (spglobal.com)
  • Permanent starting salaries increased, though more slowly than in August, easing wage‑inflation concerns for the Bank of England (kpmg.com)
  • Demand for staff still contracted, but at its softest rate since August 2024, with strongest hiring demand in IT/computing and engineering, while retail and hospitality lagged (kpmg.com)

References

Frequently Asked Questions

How did the UK labour market perform in September according to KPMG/REC?
Permanent staff placements in the UK rose at the fastest pace in four years, indicating recovery from a protracted slowdown.
What sectors saw the highest demand for staff in September?
The highest demand was reported for IT and computing, and engineering jobs.
How did permanent starting salaries change in September?
Permanent starting salaries increased but at a slower pace than in August.
Which sectors experienced the sharpest falls in staff demand?
Retail and hospitality sectors showed the sharpest declines in demand.
How is the Report on Jobs viewed by analysts?
It is seen as a leading indicator of Britain's labour market trends.

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