DAVY VIEW

This morning’s KPMG/REC report on the UK labour market paints a grim picture, showing the sharpest contraction in permanent hires in three years. REC cautioned that August is typically a weak month but also mentioned that the uncertain environment had led to redundancies and recruitment freezes. Pay growth eased to its weakest level since March 2021. The REC, PMIs and other surveys have pointed to weaker conditions but probably won’t prevent the Bank of England pressing on with a 25bp rate hike on September 21st.