Permanent placements fell in August at the quickest rate for over three years as many employers chose to postpone staff hiring amid heightened political and economical uncertainty, according to the latest Report on Jobs from the Recruitment and Employment Confederation and KPMG.

The Midlands, north and south of England all saw marked declines in permanent placements. London bucked the overall trend and saw a slight rise in permanent staff appointments in August.

James Stewart, Vice Chair at KPMG, said, “Brexit uncertainty continues to take its toll on the jobs market, evident by the quickest drop in permanent placements in over three years as employers delay hiring staff.”

The report showed a further rise in billings received from the employment of temporary staff during August. However, the rate of growth remained marginal, to highlight the weakest period of expansion since the current upturn began in May 2013. Anecdotal evidence indicated that softer demand for staff and subdued increases in vacancies had weighed on growth.

On a regional basis, temp billings growth was relatively muted in the North and South of England, while billings broadly stabilised in the Midlands. In contrast, London recorded a renewed fall, though only marginal.

Neil Carberry, Chief Executive of the Recruitment and Employment Confederation, commented, “Today’s figures are a sobering reminder to politicians of all parties that national prosperity relies on businesses creating jobs and growing careers. Britain’s record on jobs is world-leading. It’s a key part of our economic success, with recruiters at the forefront of it. And there are still great opportunities out there for those looking for a new job and a boost in earnings.”

“But all this rests on business confidence – the confidence to invest, to hire someone, to try something new – and it’s clear that things are getting harder,” Carberry continued. While we continue to benefit from the flexibility of our jobs market as demand for temps holds steady, today’s survey emphasises the real world impacts of the political and economic uncertainty businesses are facing.”

Turning to job vacancies, the Total Vacancies Index fell from 54.4 in July to 52.8 in August, to signal a softer increase in staff vacancies. The rise in demand for staff was the weakest recorded since the start of 2012. Growth of demand eased for both permanent and temporary staff, with the former expanding at the slowest rate for seven years and the latter at the softest pace for a decade.

Meanwhile, recruitment consultancies in the UK signalled a further marked drop in candidate numbers during August. This was despite the rate of deterioration easing to the weakest in 32 months. The fall was led by a further steep decline in permanent candidate numbers, as temp labour supply fell modestly.

The report also found that starting salaries for permanent workers continued to rise in August amid reports of greater competition for staff. Though sharp, the rate of inflation was the slowest recorded since December 2016. Meanwhile, temp pay growth edged down to a five-month low.

“Looking ahead and with investment also contracting, businesses desperately need clarity on Brexit outcomes in order to re-build confidence in the jobs market and be able to make more informed decisions on their long-term hiring plans,” Stewart said.