LONDON: Wages for new hires in the United Kingdom rose at their weakest pace in over four years, a sign that a cooling labour market is weighing on inflationary pressures, according to a survey monitored by the Bank of England (BoE).

Starting pay growth last month cooled to levels last seen in March 2021 when the economy was still facing Covid restrictions, the poll by the Recruitment & Employment Confederation and KPMG found.

Demand for workers fell further and the number of people seeking work surged.

“The business trading environment remains complex and it is still a mixed picture when it comes to reported business confidence,” said Jon Holt, group chief executive and UK senior partner at KPMG.

“This complexity, coupled with a subdued economic outlook, means chief execs continue to pause their future spending plans, including hiring.”

The report provides further evidence that the jobs market is deteriorating after the Labour government increased employment taxes in April.

It suggests fears that workers might step up pay demands in response to the recent uptick in inflation have yet to materialise, a relief for BoE officials who are on guard against “second-round” effects as they debate the timing of future interest-rate cuts. — Bloomberg