The number of people looking for work has risen at its fastest pace since 2020, highlighting increasing vulnerability in the UK labor market.
Closely watched research by KPMG and the Recruitment and Employment Confederation (REC) shows that increased redundancies and a decline in vacancies have led to a significant increase in the number of job seekers.
This is the 15th consecutive month of 'workforce availability' increasing, with the latest increase being the most substantial since December 2020.
Unemployment has risen in recent months while wage growth has slowed, prompting speculation that the Bank of England could cut interest rates this summer.
Recruiters have noted that higher interest rates have contributed to a slowdown in the job market.
The KPMG and REC jobs report shows that both the number of new vacancies and the number of vacancies have fallen, although not as sharply as in previous months.
The report's seasonally adjusted workforce availability index, which measures the number of job seekers, reached 62.2 in May, up from 60.4 in April. This index has been rising since March last year.
The increase is attributed to “a combination of layoffs, higher unemployment and reduced demand for workers,” the report said.
The number of people who manage to find a permanent job through recruiters has now decreased for twenty months in a row.
Although demand for staff, as reflected in vacancy rates, also fell, the decline was described as 'fractional'.
Jon Holt, Chief Executive of KPMG UK, commented on the findings, highlighting the complexity of today's labor market. He stated: “The big picture is that unemployment remains historically low, with the ease of filling vacancies returning to pre-pandemic levels.”
Holt added: “With today's figures, expected rate cuts, declining inflation and increased consumer confidence over the summer, we can hopefully look forward to a brighter economic outlook for the second half of 2024.”
Recent official data shows that the unemployment rate rose to 4.3% between January and March, compared to 3.8% in the previous quarter.
