KPMG, REC report | UK jobs market shows 'rays of light' as permanent hiring downturn ends

The UK recruitment market showed signs of improvement at the beginning of the second half of 2026, with employers gradually reviving hiring plans despite continued economic and political uncertainty.

The latest KPMG and Recruitment and Employment Confederation (REC) UK Report on Jobs, compiled by S&P Global, found that permanent placements stabilised in July after a marginal decline in June. This brought an end to the longest period of contraction recorded by the survey.

Temporary billings, meanwhile, increased for the fourth consecutive month, with the rate of growth remaining among the strongest seen over the past three years. Recruiters indicated that more employers were turning to flexible workforce arrangements as they sought to manage uncertainty and access specialist skills.

Callum Licence, Group Head of Advisory at KPMG UK and Switzerland, said: “Despite ongoing uncertainty it’s encouraging that businesses are starting to press ahead with investment, which means across the board we are starting to see the data moving in the right direction.