Low Business

"Employers are rightly hesitant about their hiring plans... So, a focus on up-skilling existing workers and attracting talent, remains absolutely essential for UK business to play its part in driving forward the economy."

It is still a good time to be a jobseeker - the number of vacancies advertised has continued to grow. Although the fastest rate of growth in vacancies was for temporary posts in the hospitality sector.

The consultancy added that ongoing skills shortages, a drop in foreign workers and hesitancy from candidates to move jobs had all led to a tighter supply of suitable staff.

The slowing down of the hiring spree that followed the pandemic comes as the Bank of England warned the UK will fall into recession in the final quarter of this year. The bank raised interest rates from 1.25% to 1.75%, in a bid to curb soaring prices.

The jobs report by KPMG and the Recruitment and Employment Confederation suggested rising operating costs and uncertainty over the UK's economic outlook is leading some firms to put the brakes on recruitment, at least for permanent roles.

July saw the slowest increase in the number of permanent jobs filled for 17 months.

KPMG said recruiters are becoming more tentative over hiring new staff.

But the soaring cost of living and tougher competition for a smaller pool of qualified candidates has also meant that the rate of starting pay continued to rise in July.

"The trend of uncertainty in the UK jobs market of the last few months continues," said KPMG's Claire Warnes.