Inflationary pressures in Europe, recession fears and trade tensions by Donald Trump’s tariffs, have dampened the confidence of employers and job seekers considering permanent job moves

International News via Reuters:

British recruiter SThree warned on Tuesday that a weak jobs market will keep profit below market expectations in its next financial year, sending its shares down 28% to their lowest in nearly 17 years.

Inflationary pressures in Europe, recession fears and trade tensions triggered by U.S. President Donald Trump’s tariffs, have dampened the confidence of employers and job seekers considering permanent job moves.

While contract hiring in the U.S., its second-largest market, showed improvement and contributed to net fees in the third quarter, the company said macroeconomic uncertainty, particularly in Europe, had persisted longer than anticipated.

SThree, which specialises in science, technology, engineering and mathematics recruitment, expects pre-tax profit for the year ending November 2026 to be about 10 million pounds ($13.6 million).

Analysts on average had forecast about 30.5 million pounds, according to a company poll.

“As we look further ahead, we are encouraged by pockets of improving momentum. However, we have not yet seen a broader market recovery and, prudently, do not think this will start to materialise near term, albeit not worsen,” CEO Timo Lehne said.

SThree plans to pursue additional cost-savings measures in fiscal 2026, including increased investment in artificial intelligence.

The company’s shares slumped 23.1% to 143 pence by 0715 GMT, pulling down the shares of rivals PageGroup, Hays and Robert Walters by between 1% and 3%.

Net fees from SThree’s largest market, Germany, fell 21% in the third quarter ended August 31, while the U.S. returned to growth with a 17% rise, supported by demand for skills in the energy sector. Overall, group net fees fell 12% to 81.5 million pounds.

SThree reaffirmed its fiscal 2025 pre-tax profit expectations of 25 million pounds.

($1 = 0.7334 pounds)

Reporting by Raechel Thankam Job in Bengaluru; Editing by Sherry Jacob-Phillips and Jacqueline Wong

The Office for National Statistics figures showed the number of workers on firms’ payrolls falling for a seventh month in a row and broader wage growth edging down

International News via Reuters:

Britain’s jobs market has lost a little more steam, official data showed on Tuesday, potentially easing worries at the Bank of England about persistent inflation pressures.

The Office for National Statistics figures showed the number of workers on firms’ payrolls falling for a seventh month in a row and broader wage growth edging down. But there was also a hint that employers might be ready for some more hiring.

The BoE is expected to keep interest rates on hold this week, having cut them in August. Many of its policymakers remain wary about inflation heat in the jobs market.

Tuesday’s figures showed the number of payrolled employees fell by a provisional 8,000 in August. July’s drop was revised to 6,000 from a previously reported reduction of 8,000.

TAX INCREASE, CONCERNS OF FURTHER RISES WEIGH ON STAFFING

Employers have blamed a tax increase ordered by finance minister Rachel Reeves for their cautious stance on staffing and many are worried about a possible further hit in her next budget due in November.

“Some businesses may be choosing to delay recruitment decisions until there is more clarity on potential tax changes,” said Yael Selfin, chief economist at KPMG UK.

Basic wage growth in the private sector – watched closely by the BoE – slowed to 4.7% between May and July from 4.8% in the three months to June.

Overall average weekly earnings, excluding bonuses, grew by 4.8%, weaker than the previous reading of 5.0% but still above the roughly 3% level seen as consistent with the BoE’s 2% inflation target.

“Today’s data release won’t do much to alleviate the Bank of England’s concerns over the upside risks to inflation,” said Ashley Webb, UK economist at Capital Economics.  

Investors do not expect another BoE rate cut for at least six months.

There were some signs in the ONS data of an improvement in employers’ appetite for hiring.

The number of job vacancies in the three months to August rose to 728,000 after touching its lowest in the previous month’s release since early 2021.

It was the first increase in the number of vacancies from one month’s job report to the next since the three months to February last year, the ONS said.

Sanjay Raja, Deutsche Bank’s chief UK economist, said a wave of staffing cuts by employers was now probably complete although budget uncertainty was likely to weigh on hiring, and pay settlements would edge lower over the rest of the year.

“This should give some comfort that the path ahead may be less bumpy than perhaps some of the survey data suggests,” Raja said.

Britain’s unemployment rate in the three months to July held at 4.7%, its highest since the second quarter of 2021, although that figure is based on a survey of households that the ONS has said is not currently reliable.

Surveys published last week showed that employers had offered the lowest pay settlements in more than three-and-a-half years in July and hiring had continued to slow – albeit by less than in previous months.

Writing by William Schomberg; editing by Suban Abdulla

Worldpanel said prices were rising fastest in markets such as chocolate, fresh meat and butter and were falling fastest in household paper, sugar confectionery and dog food

International News via Reuters:

British grocery inflation edged down to 4.9% in the four weeks to September 7, according to data from Worldpanel by Numerator, offering only modest respite for shoppers still grappling with elevated food prices.

The figure, the most up-to-date snapshot of UK food inflation, compared with 5.0% in last month’s report.

Worldpanel said prices were rising fastest in markets such as chocolate, fresh meat and butter and were falling fastest in household paper, sugar confectionery and dog food.

Britain’s food retailers have said that higher employer taxes and regulatory costs as well as increased staff wages are adding to inflationary pressure from higher prices for commodities.

The British Retail Consortium, which represents Britain’s biggest retailers, predicts that food inflation will be up to 6% by the end of the year, putting more pressure on household budgets in the run up to Christmas.

The Bank of England has forecast it will hit 5.5% before Christmas and then fall back as global wholesale factors fade.

Overall UK inflation hit 3.8% in July, according to official data published last month, the highest among the G7 economies. Data for August will be published on Wednesday.

Worldpanel said industry leader Tesco won more market share than any other grocer in the 12 weeks to September 7, accounting for 28.4% of all sales, up 0.8 percentage points on the year. Its sales rose 7.7% – its highest rate of growth since December 2023.

Sales at number two player Sainsbury’s rose 5.4% but Asda remained the industry laggard with sales falling 2.7% and a loss of 0.9 percentage points of market share on the year.

Discounter Lidl and online supermarket Ocado remained Britain’s fastest growing grocers with sales growth of 11.0% and 11.9% respectively.

Worldpanel highlighted sales growth for supermarkets’ premium own label lines of 10.3% over the 12 weeks, making it six straight months that they’ve increased by double digits – more evidence that consumers are looking to save money by treating themselves at home rather than dining out.

UK supermarkets’ market share and sales growth (%)

Market share Market % change in

12 weeks to share 12 sales

September 7 weeks to (year-on-ye

2025 September 8 ar)

2024

Tesco 28.4 27.6 7.7

Sainsbury’s 15.1 15.0 5.4

Asda 11.8 12.7 -2.7

Aldi 10.7 10.7 4.7

Morrisons 8.4 8.7 1.4

Lidl 8.2 7.8 11.0

Co-operative 5.4 5.8 -2.0

Waitrose 4.4 4.5 4.3

Iceland 2.3 2.3 4.7

Ocado 1.9 1.8 11.9

Source: Worldpanel by Numerator

Reporting by James Davey, Editing by Paul Sandle