Hiring activity fell sharply in London in February, according to the Report on Jobs released on 10 March by the Recruitment and Employment Confederation and KPMG. 

Both permanent placements and temporary billings in the city fell during the month, with recruitment strategies impacted by ongoing economic uncertainty and recent changes to government policies following the October Budget.

“Hiring activity in London remained subdued in February, as a challenging macroeconomic picture and pay pressures led to notable slowdowns in both permanent staff hiring and temporary billings,” Anna Purchas, London office senior partner at KPMG UK, said in a press release.

“The capital saw the steepest fall in short-term billings of all UK regions, but it was encouraging to see the decline in permanent placement ease to the slowest for four months, suggesting the market may be bottoming out as firms begin to look ahead for the new tax year.”

The report is compiled by S&P Global and is based on responses to questionnaires sent to a panel of 400 recruitment and employment consultancies.

The number of people placed into permanent roles in London fell for the seventh successive month in February — the strongest since October 2020 — while the Temporary Billings Index dropped for the 14th month in a row, according to the survey data.

The report said the downturn was driven by the upcoming increase in National Insurance Contributions and minimum wage hikes, economic uncertainties stemming from the October Budget, and geopolitical instability.

“When excluding the pandemic months, the latest declines in demand for both permanent and temporary staff were the most substantial since the Global Financial Crisis [in 2008],” the report said.