Mid-market leaders tell a similar story. A Vistage survey found 51 per cent of CEOs have slowed, paused or reduced recruitment as a direct result of tax and regulatory pressures, even though 82 per cent say relocating outside the UK is very unlikely. More than four in five report moderate or substantial increases in input costs, while two-thirds say customers have become significantly more price-sensitive, limiting their ability to pass on higher costs.
Not all segments are frozen. The latest KPMG and REC Report on Jobs shows temporary billings growing for a fourth straight month at rates among the strongest since early 2023, and temporary vacancies rising for the first time in two years. Permanent placements stabilised in July after a 45-month decline, though recruiters note demand for permanent staff remains subdued amid political and economic uncertainty and higher labour costs.
Wage growth adds another layer. Regular pay growth in the private sector is at its lowest rate in five and a half years, while the unemployment rate sits at 4.9 per cent. The number of people starting new jobs has hit a five-year low, suggesting workers are staying put rather than moving voluntarily. With the Bank of England's next rate decision approaching, the combination of cooling vacancies, stagnant hiring intentions and softening private-sector wage growth will feed directly into the policy calculus. The question now is whether fiscal adjustments or a shift in monetary stance can restart the hiring machinery before the stall becomes structural?