12th Jan 2026 09:33
(Alliance News) - UK hiring activity weakened further at the end of 2025, with permanent placements falling at the fastest pace since August amid subdued employer confidence and rising cost pressures, survey data published on Monday showed.
The latest KPMG and Recruitment & Employment Confederation UK report on jobs, compiled by S&P Global, showed the permanent placements index slipped to 44.3 points in December from 45.5 in November, signalling a sharper contraction.
Any reading below 50 points indicates a month-on-month decline.
Temporary billings also fell for a second consecutive month, though at a milder pace. The temporary billings index edged down to 47.6 points from 48.8, pointing to a modest reduction in demand for short-term staff.
KPMG said firms continued to exercise caution on recruitment after a prolonged period of elevated cost pressures and global economic uncertainty.
"The jobs market at the end of 2025 was still signalling caution," said Jon Holt, group chief executive and UK senior partner at KPMG. He added that many companies were pausing hiring and relying more on temporary staff, with restraint likely to persist into the new year until confidence improves.
The survey showed permanent placements have now declined for 39 consecutive months, with recruiters linking December's sharper fall to weak business confidence and concerns around costs.
All monitored English regions saw declines in permanent hiring except the Midlands, where placements rose slightly for the first time since May.
Demand for staff also softened further. The total vacancies index slipped to 43.4 points in December from 43.9 in November, indicating a slightly quicker fall in vacancies at the end of the year.
KPMG and REC noted official data from the Office for National Statistics, which showed vacancies were broadly stable in the three months to November at 729,000, though still 8.3% below pre-pandemic levels.
The total staff availability index stood at 66.3 points in December, only marginally lower than November's 66.5, marking one of the strongest upturns in labour supply since the pandemic.
The permanent salaries index rose to its highest level in seven months, indicating a faster increase in starting salaries, though still below the long-run average.
Neil Carberry, chief executive of the Recruitment & Employment Confederation, said December data can be difficult to interpret but noted some tentative signs of stabilisation in the second half of 2025.
"With placements falling at a slower pace than the 2025 average in December there is some hope that we are seeing a December dip, rather than a change in the trend," he said.
The survey data were collected between December 4 and 17, covering responses from around 400 UK recruitment and employment consultancies.
By Eva Castanedo, Alliance News reporter
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