The latest KPMG and REC, UK Report on Jobs (S&P Global, November 2025) presents a labour market still characterised by contraction, albeit with signals of stabilisation as the year closes. Across the UK, both permanent hiring and temporary activity softened again in November, with employer uncertainty, particularly ahead of the Autumn Budget, and rising staffing costs suppressing demand. Despite this, rising staff availability and pockets of wage inflation suggest improving conditions for employers planning strategic hiring in early 2026.
According to the national report, permanent placements continued to fall in November, though the decline eased to its slowest rate since July 2024. Temporary billings also slipped back after October’s mild growth signalling a modest contraction. Commentary from KPMG’s Lisa Fernihough underscores ongoing caution: businesses are still “balancing recent tech investments against the need to expand their workforce,” while Neil Carberry, REC Chief Executive, highlights that despite some stabilisation, “confidence” remains the missing ingredient for a labour market rebound.
Demand for Staff Continues to Fall
November extended the two-year trend of falling vacancies, though at the slowest rate since June. Permanent vacancies continued to decline more steeply than temporary ones, reflecting employers’ preference for flexibility. Public sector demand remained especially weak, particularly for short-term roles.
Vacancies fell across all ten monitored sectors, with the sharpest drops for Construction and Retail, while Blue Collar experienced the mildest contraction. Nursing, Medical & Care was the only category to show an increase in temporary vacancies, highlighting sustained structural shortages in clinical and social care roles.
Regional data reinforce this picture.
- London registered one of the sharpest reductions in job openings of all English regions, with permanent vacancies deteriorating for the eighth consecutive month.
- South of England saw continued contraction in both permanent and temporary vacancies, though at softer rates than previous months.
Sharp Rise in Candidate Availability
A prominent feature of the November data is the accelerated rise in labour supply, the second-fastest increase since late 2020, driven by redundancies and fewer open roles.
This trend is mirrored across regions:
- London saw marked increases in both permanent and temporary staff supply, the latter being the steepest among all regions.
- The South of England recorded the sharpest rise in permanent candidate supply nationwide as redundancies and intense competition for limited roles drove talent availability upward.
For employers, this indicates a highly favourable period for talent acquisition, especially for specialised roles historically affected by scarcity. Recurring mentions across regional reports highlight that skills in IT, engineering, professional services, and healthcare remain in demand even as broader labour availability grows.
Pay Pressures: Starting Salaries Firm, Temp Wages Mixed
Despite increased candidate supply, permanent starting salaries rose at the fastest rate in five months as companies sought to attract skilled applicants. However, competition among candidates prevented more pronounced wage inflation.
Regionally:
- London experienced the strongest rise in starting salaries in five months, broadly aligned with the national trend, though temp wage inflation slowed to its weakest in 14 months.
- In the South of England, permanent salaries increased for the first time in four months, albeit moderately, while temporary pay rose only marginally after several months of decline or stagnation.
ONS data included in the reports also show average weekly earnings growing 4.8% year-on-year to September, slightly slower than August, though public sector pay continues to outpace.
Regional Market Overview
London
Permanent placements fell sharply for the eighth consecutive month, while temporary billings rose for the first time in nearly two years, suggesting a pivot towards flexibility ahead of year-end. London’s downturn in demand was the steepest of all monitored regions, yet its candidate availability surged the most, especially for temporary labour, pointing to significant reshuffling and job-seeking activity among white-collar and service-sector workers.
South of England
Permanent placements declined but at the second-slowest rate in over two years, offering “qualified cause for optimism,” according to KPMG’s David Williams. Temporary hiring weakened further, but employer demand contracted more slowly than earlier in the year. With the strongest rise in candidate availability across England, the South presents a near-term “window to access quality talent before competition intensifies”.
Broader Market Implications
Taken together, the November findings reveal a labour market still in contraction but showing signs of stabilisation:
- Demand is falling more slowly, suggesting the steep declines of 2023–24 may be bottoming out.
- Candidate supply is surging, improving hiring conditions and reducing the talent shortages that dominated the post-pandemic period.
- Wage inflation is moderating, particularly for temporary staff, easing cost pressures on employers.
- Confidence remains the pivotal missing factor as employers await greater economic clarity before committing to permanent headcount growth.
This picture aligns with REC’s wider Recruitment Industry Status Report, which notes that temporary staffing remains a strategic anchor during uncertain conditions, while permanent hiring continues to face headwinds.