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September’s Report on Jobs, from the REC and KPMG, showed that UK labour market conditions continued to deteriorate. Overall demand for staff fell at the sharpest rate in the survey’s 11 year history, leading to marked declines in permanent and temporary appointments. Wages and salaries were broadly static as strongly rising candidate availability dampened pay pressures.

Kevin Green, the REC's Chief Executive says: “The rapidly worsening economic outlook is now really starting to bite in the jobs market with temporary and permanent appointments dropping rapidly. With demand for workers declining at its fastest pace since October 2001, it is essential that the Government ensures that new measures do not exacerbate the trend.

“To this end, we are calling on the Government to reconsider removing the VAT staff hire concession. Removing the concession will add £400million to employer costs at a time when key sectors like charity, financial and health-care can least afford it.”

Alan Nolan, Director at KPMG comments: “The impact of the banking crisis has caused the UK jobs market to deteriorate in such a manner not seen since September 2001. Employers are clearly feeling the effects, with redundancy programmes at the centre of all cost reduction strategies and by refusing to invest in the skills available in an ever increasing labour pool. Continuing pressure on both permanent and temporary placements may also see a radical overhaul of the manner in which the UK recruitment industry operates. This may involve further consolidation, strategic collaboration between agencies and maximum automation of process, as the industry seeks to ride out the storm.”

The Report on Jobs, published today by the REC and KPMG, provides the most comprehensive guide to the UK labour market, drawing on original survey data provided by recruitment consultancies.