Weak business confidence in the UK continues to put the brakes on hiring and talent investment. In December, permanent placements fell at the sharpest rate since August, according to monthly data from KPMG and the Recruitment and Employment Confederation (REC).
The Permanent Placements Index — the UK Report on Jobs’ main hiring gauge — remained below the neutral level of 50 and declined sharply to 44.3 in December from 45.5 in November, when the UK signalled some signs of increased market stability. The latest reading was in line with August figures (44.2) but still above the last significant decline in June (39.1 from 44.2 in May).
A number of recruiters surveyed connected the end-of-year downturn to cost concerns and looming economic uncertainty. Overall, December’s figures extend the current downturn in permanent staff appointments to 39 months.
Temporary hiring also fell for a second consecutive month, but at a softer rate than for permanent staff. The Temporary Billings Index was 47.6, continuing a downward trend that started in November (48.8) after a temporary hiring rebound in October (50.2).
While employers look to more cost-effective solutions to plug staff shortages, subdued economic conditions and cost constraints also continue to slow demand for temporary employees, the report said. However, the rate of reduction in December was mild and slower than average for 2025.
Vacancy data reinforces the sharp decline in demand for staff in the UK. The Total Vacancies Index slipped from a five-month high of 43.9 in November to 43.4 last month. The report found that the rate of contraction in December remained more pronounced than the average since the current period of falling vacancies began in November 2023.
The Total Staff Availability Index reached 66.3, down slightly from November’s 66.5. The availability of workers has now increased in each of the past 34 months.
While the latest slip back likely reflects the economic strain UK employers are under, it’s difficult to infer from December job data, Neil Carberry, the REC’s chief executive, said in the report. “[The] second half of 2025 showed some signs of a long run of negative data softening, and 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,” Carberry said.
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