A lorry driver passes a sign on the side of his vehicle advertising for jobs as he makes a delivery, in London, Britain, October 13, 2021. REUTERS/Toby Melville

LONDON, July 8 (Reuters) – British employers slowed their hiring via recruitment agencies once again in June as vacancies increased at the weakest rate in more than a year, according to a survey that adds to signs that the labour market is losing some of its inflationary heat.

In a report that the Bank of England will study as it weighs up its next interest rate decision, a measure of permanent staff hiring by accountants KPMG and the Recruitment and Employment Confederation (REC) fell sharply to 54.8 from 59.2 in May.

That was the seventh month in a row that it has declined. Although it remained above the 50 threshold for growth, it was the lowest reading in 16 months, as was the REC’s measure of temporary staff hiring.

Neil Carberry, REC chief executive, said the data showed the labour market was still strong but suggested that the peak of the post-pandemic hiring spree had passed.

“The big question now is the effect that inflation has on pay and consumer demand over the course of the rest of the year,” he said.

The BoE has said it is ready to act forcefully if it sees signs that the recent jump in inflation to more than 9% is creating more persistent inflation problems. But it is also worried that Britain’s economy is losing momentum.

Vacancies increased at the slowest pace since March 2021, the survey showed. Starting salaries were the weakest since August for permanent workers and since July last year for temporary workers.

The availability of candidates in three months shrank by the most in three months, in part because of hesitancy by people to switch jobs in the face of uncertainty about the economy.

Reporting by William Schomberg, editing by Andy Bruce

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