UK Jobs Market Contracts for 39th Month Amid Rising Salaries
The UK jobs market contracted for the 39th consecutive month in December 2025, with hiring falling at its steepest pace in four months. Despite this, starting salaries for permanent positions rose at their fastest pace since May, creating a conundrum for the Bank of England as it weighs interest rate cuts against persistent wage pressures.
Insights:
In December 2025, Britain's jobs market contracted for the 39th consecutive month, with hiring falling at its steepest pace in four months. This decline, highlighted by the latest Recruitment and Employment Confederation (REC)-KPMG survey, underscores the cautious stance employers are adopting in response to increased payroll taxes. Despite the weakening hiring demand, starting salaries for permanent positions rose at their fastest pace since May, presenting a mixed signal for policymakers.
