UK labor market in trouble

The Markit/REC report released Friday provided a comprehensive guide to the UK labor market, drawing on original survey data by recruitment consultancies across the nation.

The fresh study said the number of people placed in permanent positions decreased for a second successive month in July. It emphasized that the rate of contraction accelerated to levels not seen since May 2009, with respondents frequently citing Brexit-related uncertainty.

The report added that a marked decrease in the number of new permanent jobs was logged by consultancies based in London.

Long-term fallout unclear

"The UK jobs market suffered a dramatic freefall in July," REC Chief Executive Kevin Green said in a statement on the organization's website. "The sharp fall in placements suggests that businesses are highly cautious about committing to new hires; economic turbulence following the vote to leave the EU is undoubtedly the root cause."

The Markit/REC study also noted that starting salaries for successful permanent candidates edged up in July, but the rate of growth eased to a 38-month low.

But Kevin Green warned it would be premature to sound the alarm bell. "While there are worrying signs, it's important we don't jump to conclusions from one month's data," he said.

"The truth is we don't know what long-term consequences the referendum result will have on UK jobs."

hg/mrk (Reuters, REC)