‘Urgent’ action required as London jobs market falls at steepest rate since Covid

The jobs market in London has stalled, prompting calls for “urgent” action by the government to help boost growth in the capital ahead of the March Budget. 

Calls comes as a new study shows the number of vacancies in London fell for the tenth month in a row with a pulse reading of 47.0 which is weaker than the rest of the country. 

Any figure below 50 signals a contraction.

The research conducted by KPMG and REC London labour-market pulse check, also revealed the number of permanent placements in the capital decelerated over the fourth months to December. 

 This marked the steepest drop in the capital since May 2020.

Muniya Barua, deputy chief executive of BusinessLDN, said that the protracted slowdown in London’s jobs market is “sending a clear message to the Chancellor”. 

He [Jeremy Hunt] needs to deliver a bold pro-growth package in the March Budget.

“Reversing the decision to scrap VAT-free shopping on goods for international visitors would provide an immediate economic boost. 

“Going further to  make childcare more affordable and accessible would help more people return to work. And providing the clarity needed to accelerate housebuilding would help to unlock jobs, growth and more homes for Londoners.”

It comes as today’s GDP rating showed the UK economy grew 0.3 per cent in November but the UK remains on a recession knife-edge.

 Neil Carberry, REC chief executive, added:“The London job market has remained remarkably resilient in the face of economic headwinds in the past 12 months, but it is clear that permanent hiring has slowed markedly recently. 

“Employers in the capital are tapping into the flexibility of temporary working to keep offering jobs and bring in vital new skills despite the economic uncertainty they face. Pay for both temps and perms is growing, but not at the rates we were seeing a year ago.

He added: “A spring Budget that includes a proper plan for workforce capacity, embraces better welfare-to-work support and reforms the Apprenticeship Levy cannot come soon enough because any return to growth in 2024 will put strain on a labour market with embedded shortages.”

City A.M has contacted the Treasury for a comment.