Britain’s jobs market may finally be showing signs of turning a corner.
According to the latest KPMG and Recruitment & Employment Confederation (REC) Report on Jobs, permanent job placements in the UK stabilised in July 2026, bringing an end to a 45-month period of decline. The permanent placements index rose to 50.0 in July from 49.1 in June, with 50 representing no change.
While the figures do not yet point to a strong recovery, they represent an important change after more than three years of weakening permanent recruitment.
A More Stable Hiring Environment
The latest data suggests employers are becoming slightly more willing to maintain or expand their workforces.
Demand for permanent staff remains subdued, however, with permanent vacancies continuing to decline. The pace of decline has eased, while demand for temporary workers has moved in the opposite direction.
Temporary vacancies increased for the first time in two years, with the rate of growth reaching its strongest level since August 2023. Temporary billings also increased for a fourth consecutive month, reflecting continued demand for more flexible workforce arrangements.
This suggests businesses are still cautious about making long-term commitments but are increasingly prepared to bring in workers where immediate or project-based requirements exist.
Pay Growth Also Shows Improvement
Another encouraging signal came from starting salaries.
The report found that pay growth for both permanent and temporary staff strengthened in July. This is significant because wage growth had been under pressure alongside the broader slowdown in recruitment.
For employees and jobseekers, improving salary growth could indicate that competition for certain skills is beginning to return, even while overall hiring remains cautious.
Businesses Remain Cautious
Despite the positive indicators, the UK labour market is far from booming.
Businesses continue to face political and economic uncertainty, alongside higher employment costs. These pressures are making companies more careful about permanent recruitment and investment decisions.
KPMG’s Callum Licence said businesses would be looking for signs that the new government’s policies could translate into greater confidence to invest and hire.
That makes the coming months particularly important. If the stabilisation continues, it could provide businesses with greater confidence to move from temporary hiring and cautious recruitment towards longer-term workforce expansion.
What This Means for the UK Economy
Employment is closely linked to business confidence and consumer spending. A sustained improvement in recruitment could therefore become an important indicator of broader economic confidence.
However, one month of stabilisation is not enough to establish a long-term trend.
The fact that permanent vacancies are still falling shows that employers remain cautious. At the same time, the rise in temporary hiring suggests businesses may be looking for flexibility while waiting for greater economic certainty.
The current picture is therefore best described as stabilisation rather than recovery.
A Potential Turning Point?
After 45 months of declining permanent placements, even a move to no change is significant.
The latest figures provide a reason for cautious optimism for UK workers, recruiters and businesses. But the real test will be whether permanent hiring can remain stable and eventually return to sustained growth.
For now, the UK’s labour market appears to have stopped getting worse. Whether it can turn that stability into a genuine recovery will depend on business confidence, employment costs, economic conditions and government policy in the months ahead.
The UK jobs market may not be recovering yet—but after 45 months of decline, it may finally be finding its floor.
