Redundancies drive biggest jump in job-seekers since 2020

The number of people looking for jobs has risen at its fastest pace since 2020, in a sign of growing weakness in the employment market.

A combination of more redundancies and fewer job openings has meant a surge in job-seekers, according to a closely watched survey by KPMG and the Recruitment and Employment Confederation (REC).

It was the 15th consecutive month in which “staff availability” had risen, with the pace of the increase being the highest since December 2020.

Unemployment has climbed in recent months while wage growth has cooled, raising the prospect of the Bank of England cutting interest rates this summer.

Recruiters have said that high interest rates have led to a slowdown in the labour market.

The KPMG and REC Report on Jobs showed that both the number of employees securing new jobs had fallen alongside the number of vacancies, although not as fast as in previous months.

The report’s seasonally adjusted staff availability index, a measure of the number of people looking for jobs, hit 62.2 in May, up from 60.4 the month before. It has been rising since last March.

The increase was attributed to “a mixture of redundancies, higher unemployment and reduced demand for staff”, the report said.

The number of people finding permanent jobs through recruiters has now fallen for 20 consecutive months.

Demand for staff in the form of vacancies also fell, although the decline was described as “fractional”.

Jon Holt, chief executive of KPMG in the UK, said the figures showed “complexities in the current labour market”.

He said: “The big picture is that unemployment is historically low with the ease of filling vacancies back to pre-pandemic levels.

“Taken together with today’s data and expected interest rate cuts, inflation easing and increased consumer confidence over the summer, we will hopefully move towards a better economic outlook for the second half of 2024.”

Official data showed last month that the unemployment rate hit 4.3pc between January and March, up from 3.8pc in October to December.