LONDON — Britain's jobs market is showing early signs of stabilisation, with new recruitment data suggesting that the sharp decline in permanent hiring is beginning to ease.

The latest survey from KPMG and the Recruitment and Employment Confederation (REC) found that permanent staff placements continued to fall in July, but at a slower rate than in previous months. At the same time, demand for temporary workers strengthened.

Temporary hiring recorded its strongest growth since early 2023, suggesting that employers may be becoming more willing to add workers while remaining cautious about long-term commitments. Businesses are increasingly using flexible recruitment to respond to changing demand and economic uncertainty.

Starting salaries also continued to rise, particularly for temporary positions, as companies compete for workers with specialised skills. The combination of stronger temporary recruitment and slower declines in permanent placements provides a cautiously positive signal for Britain's labour market.

However, the recovery remains fragile. Permanent vacancies are still declining and employers continue to face uncertainty over costs, demand and the wider economic outlook.

Recruitment firms say increased hiring activity in sectors including technology, legal services and accounting is providing some encouragement. If the improvement continues, it could offer further evidence that Britain's employment market is beginning to recover after a prolonged period of weakness.

For businesses and workers, the key question is whether July's improvement can develop into sustained employment growth. Upcoming labour-market data will provide a clearer picture of whether companies are moving from cautious temporary recruitment towards stronger permanent hiring.