Job vacancies are decreasing and the economy is showing signs of cooling, indicating a possible recession in the near future, as reported by James Reed, the CEO of Reed, one of the UK’s prominent recruitment firms.
In an interview with the BBC, James Reed highlighted a significant drop in job advertisements on their platform and recommended the government to reconsider the recent hike in employer taxes on staff salaries.
Reed compared his firm to a crow’s nest on a ship, detecting early signs of shifts in the labor market through the vacancies appearing on their website.
While the government acknowledged facing tough decisions, it projected an increase in employment over the next three years based on official forecasts.
According to Mr. Reed, vacancies listed on Reed’s website dropped by 13% between October and November, marking a 26% decline compared to the previous year, which he deemed as a significant downturn.
The notable decrease in job vacancies raised concerns for Mr. Reed, suggesting a possible impending recession based on historical indicators.
Economists define a recession as a contraction in the economy for two consecutive quarters. Recent data showed growth in the UK economy earlier this year, followed by a decline in September and October, particularly affecting industries reliant on lower-paid workers.
The upcoming official job figures will reveal whether the rise in the UK’s unemployment rate has persisted into October after a moderate increase to 4.3% in September from 4% in the preceding quarter.
Mr. Reed attributed business concerns to the Budget at the end of October, especially highlighting the upcoming raise in employers’ National Insurance Contributions (NICs) and the reduction in the threshold for NIC payments.
Despite the government’s explanation that the tax increase was essential to cover government overspending, Mr. Reed criticized the policy for passing the burden onto businesses, potentially leading to job cuts and decreased investments.