UK Jobs Market Shows Signs of Stabilisation, Says REC and KPMG

UK Jobs Market : In July 2026, the UK job market showed early indications of stabilization, providing some comfort after a prolonged period of weakness. According to the newest data from the Recruitment and Employment Confederation (REC) and KPMG, permanent hiring has stopped falling for the first time in nearly four years.

According to the survey, companies may be growing more inclined to retain permanent recruiting, despite ongoing concerns about pay growth and company confidence. The study was performed from July 9 to July 27 and shows hiring activity across the country amid a time of intense economic and political scrutiny.

UK Jobs Market Shows Signs of Stabilisation After Nearly Four Years

The REC-KPMG poll discovered that the index for permanent staff placements increased to 50.0 in July, up from 49.1 in June. A reading of 50 suggests that situations are mostly constant.

This is an important milestone since it marks the end of a 45-month drop in permanent placements. While the improvement does not indicate a substantial rebound, it does hint that the long-running decline in hiring may have slowed.

The poll is based on answers from over 400 recruiting agencies, making it one of the first indicators of UK recruitment trends.

Temporary hiring remained somewhat stronger than permanent hiring, albeit less than the prior month. The temporary placements index declined to 51.9 in July, from 52.7 in June.

Temporary positions also climbed for the first time in two years, which was a positive indicator. This shows that the demand for flexible employment is improving.

The availability of temporary workers also expanded at the slowest rate since May 2023, indicating that the gap between labor supply and employer demand may be narrowing.

UK Jobs Market Faces Wage Pressure Despite Hiring Stability

One of the primary issues raised in the research is the ongoing growth in starting salary.

People joining permanent positions saw their pay rise the most in six months, while compensation for temporary workers increased at the quickest rate in 26 months.

Higher starting salary can help employes, especially after a period of slow recruiting. However, increased salary prices can put further strain on organizations that are already coping with higher operating expenses.

The figures will also be keenly monitored by Bank of England policymakers, since prolonged wage growth can boost inflation and affect future interest-rate decisions.

Callum Licence, Head of Advisory at KPMG UK and Switzerland, stated that businesses will be looking to see if government measures will boost confidence and encourage them to invest and hire.

Overall, the new numbers paint a cautiously optimistic picture. Permanent hiring has stabilized after a nearly four-year slump, temporary positions are expanding, and wage growth remains high.

The following months will determine if July’s uptick is the start of a larger rebound or simply a halt in the UK’s long-running job market slump.