UK firms pause hiring as Iran war stings, REC survey shows

LONDON - Britain's jobs market cooled rapidly in May after employers put the brakes on permanent hiring after the Iran war heightened cost pressures and uncertainty about the economic outlook, an industry survey showed on Monday.

The monthly Report on Jobs from accountants KPMG and the Recruitment and Employment Confederation, a trade body, showed permanent job placements fell at the fastest pace since July 2025. Placements have fallen for 44 months in a row, the longest period of contraction since the survey began in 1997.

"Ongoing global and domestic uncertainty is making businesses more cautious, and that is increasingly reflected in hiring decisions. While some employers are turning to temporary contracts to retain flexibility, many permanent hiring plans are being delayed or put on hold," Jon Holt, KPMG's group chief executive, said.

REC and KPMG also said:

• Permanent staff placements fell to 44.1 in May, down sharply from 47.5 in April

• Firms ramped up hiring of temporary staff, with the index rising to 52.2 from 50.4, expanding at the quickest pace since April 2023, as firms opted for short-term staff due to uncertainty about the Iran war

• The availability of candidates for permanent and temporary roles also rose faster than in April

• Vacancies dropped at the sharpest pace since February, driven by a sharper fall in vacancies for permanent roles

• The survey was based on responses from a panel of around 400 recruitment agencies between May 12 and May 22

(Reporting by Suban Abdulla; editing by David Milliken)

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published June 7, 2026 at 6:29 PM.