Permanent job placements fell in October at the second-fastest pace this year, as employers pulled back on hiring, according to data compiled by KPMG and the Recruitment & Employment Confederation (REC).
The decline reversed the positive momentum seen in the jobs market over recent months. Job vacancies also continued to fall, though the rate of decrease was the gentlest recorded in more than two years.
Rising costs weigh on employers
Researchers attributed the fall in permanent placements, alongside the first drop in temporary billings since March, partly to rising borrowing costs driven by higher interest rates and energy expenses weighing on businesses.
KPMG UK chief executive Jon Holt warned that mounting cost pressures could further dent employer confidence in taking on new staff.
"October saw employers pull back on hiring in the month leading up to the Budget, ending a run of more positive news over recent months," Holt said. "Businesses will now be assessing whether the measures announced in the Budget give them enough stability to absorb the external pressures and higher costs they face."
Budget 'missed opportunity' for jobs boost
Maxine Bligh, interim chief executive at the REC, noted that some degree of resilience in recruitment across London and the north of England was encouraging, though she described the Budget as a "missed opportunity for both jobs and growth".
A cooling jobs market could undermine the argument for an imminent interest rate rise, with Bank of England policymakers contending on Thursday that signs of stabilisation had contributed to inflationary pressures within the UK economy.
Vacancies fall below 700,000
The latest official figures released by the Office for National Statistics revealed that vacancy levels had fallen below 700,000 for the first time in more than five years.
S&P Global data analysed by KPMG and REC researchers indicated a growing demand for workers in IT and computing, engineering and construction.
