Britain’s labour market showed signs of cooling in August, with a significant drop in job placements and a slowdown in pay growth, according to a survey released on

Monday. The findings, from the Recruitment and Employment Confederation (REC) and accounting firm KPMG, may strengthen calls for the Bank of England (BoE) to consider further interest rate cuts.

The monthly Report on Jobs revealed that permanent job placements fell at their fastest rate in five months. Additionally, starting salary growth for permanent positions slowed to a five-month low, marking one of the weakest rates seen since early 2021.

KPMG UK’s chief executive, Jon Holt, noted that business confidence remains volatile, despite the BoE’s recent decision to cut interest rates. "The fact that salary growth last month was at its weakest since March could support the argument for further rate cuts when the Monetary Policy Committee meets to discuss the future direction of interest rates," Holt said.

Most economists surveyed by Reuters believe the BoE will wait until November before implementing another rate cut, although financial markets currently indicate a one-in-four chance of a reduction on September 19.

Meanwhile, official labour market data due on Tuesday is expected to show solid employment growth alongside a further deceleration in wage growth. Photo by Phil Whitehouse, Wikimedia commons.