Shoppers in Oxford Street in central London, Britain, 12 August 2022. (Photo: EPA-EFE / Tolga Akmen) The report by the Recruitment & Employment Confederation showed companies are starting to impose hiring freezes because of pessimism about the outlook, and employees are deciding “stay put” rather than apply for other jobs.
As a result, vacancies and the number of people placed in roles both rose at the slowest pace in more than a year and a half.
Candidates remained in short supply, however, and firms needing to fill positions were forced to pay up. The rate of starting-salary inflation moderated only slightly in September as workers demanded to be compensated for the soaring cost of living.
“With unemployment at record lows, pay continues to rise for both temporary and permanent workers starting new jobs, and activity levels across the recruitment and staffing industry remain high,” said Neil Carberry, chief executive of the REC. “While any economic slowdown this winter will affect the market, the extent of shortages mean that hiring will remain a focus for employers.”
The tightness of the labour market is a key concern for the Bank of England, which has raised interest rates seven times since December in an effort to prevent a wage-price spiral.
Further increases are anticipated in the coming year, worsening the plight of consumers and businesses already struggling with near double-digit inflation. Some economists say the economy may already be in a recession that could stretch into the early months of 2023.
Meanwhile, food inflation has hit 15% for Britain’s pubs and restaurants as the cost of buying ingredients keeps rising.
The price of food and non-alcoholic drinks supplied to the UK’s hospitality sector climbed again in August, according to the CGA Prestige Foodservice Price Index, having recorded double-digit inflation every month since February.
Prices were up 2% compared to July, with milk, eggs, cheese, oils and fats jumping sharply.
“While some pressures may be easing, a tough winter lies ahead,” said James Ashurst from research consultancy CGA by NielsenIQ, calling for more government support for the catering industry.
One in 10 companies in the sector are at risk of collapsing this winter, the boss of lobby group UKHospitality told Bloomberg Radio last month, despite a government program to cap businesses’ energy costs.
“In the months ahead it is likely that we will reach peak inflation, then see some levelling-off, before a gradual fall during next year,” said Shaun Allen, chief executive officer of Prestige Purchasing, a procurement company for the leisure sector that helps to compile the survey. BM/DM