UK companies are cutting back on hiring due to economic uncertainty, new data this morning shows.

The Recruitment & Employment Confederation (REC) has reported that the number of job vacancy adverts dropped below 1.6m last month, for the first time in two years.

REC says the number of overall active job postings fell by 10% between August and September, to 1,544,753.

REC chief executive Neil Carberry says companies want to hear Rachel Reeves’s plans before committing to hiring staff:

“A fall in new job ads is symptomatic of a wait-and-see approach some employers are taking as they wait for more from the government around their plans to fuel the economy. This week’s announcement of the Industrial Strategy has helped, as has the clarity on the Employment Rights Bill. A longer timescale for the Bill has settled fears of policies being rushed in, but there are still nerves about the longer-term impact on hiring with so much still to determine.

This is why most businesses are looking to the Budget at the end of the month before they decide how to invest, to tell them what money they will have to invest in hiring. The Chancellor must demonstrate an understanding of the challenging cost environment that businesses face after a period of high inflation and interest rates, and the relief they now need.

But while the number of job postings is down, some skills are still in short supply across the economy, Carberry adds:

“Today’s Labour Market Tracker shows that Head Teachers and Principals (41.6%), School Midday and Crossing Patrol Occupations (25.5%) and Authors, Writers and Translators (19.9%) had the largest increase in the number of job postings in September.”

Deloitte have also reported that confidence among UK consumers has reached its highest in over five years – despite the apparent gloom about this month’s budget.

Its latest Consumer Tracker has found that people are more upbeat about children’s education and welfare, following the introduction of the government’s extended offer of free childcare.

However, the poll also found that consumers are less confident about state of economy ahead of Autumn Budget.

Deloitte says:

• Eight consecutive quarters of improved consumer sentiment mark highest level of confidence since Q2 2019;

• Sentiment towards children’s welfare and job opportunities provided biggest confidence boost;

• Consumer sentiment towards the state of the UK economy fell five percentage points on the previous quarter, but remains significantly improved year-on-year;

• Spending on discretionary items rose, reaching positive territory for the first time since Q3 2021.

The survey was carried out between 6th and 8th September.

Oliver Vernon-Harcourt, head of retail at Deloitte, said:

“A back-to-school boost saw retail sales rise for a third consecutive month, with sales of computers and additional clothing and footwear bolstering growth. While many consumers continue to hold back on purchasing big ticket items, the sale of smaller non-essential luxuries has propped up sales values.

“Consumer confidence continues to improve, now returning to pre-pandemic levels for the first time. While discretionary spending has seen improvement in the last quarter, with some consumers allowing budget for little treats and summer holidays, challenges remain. Some consumers are spending more, but retailers remain cautious in the sector’s most crucial few months of the year.

Neil Birrell, chief investment officer at Premier Miton Investors , says the rise in retail sales is a good sign for the economy:

“The wet weather didn’t deter the British public spending their money in September, as shown by stronger than expected retail sales.

This runs contrary to what consumer confidence data is telling us and indicates that wage growth is an important factor. The consumer sector is very important within the economy and even though this is just one month’s data, it suggests the economy is more robust than was thought.”

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Growth in retail sales across Great Britain has slowed, as consumers snapped up technology but cut back on supermarket spending.

Sales volumes grew by 0.3% in September, new data from the Office for National Statistics shows, down from 1.0% growth in August.

That’s stronger than expected – City economists had predicted a 0.3% fall for the month.

Computers and telecommunications retailers grew strongly in the month – perhaps due to students buying PCs for the new term? – but were partly offset by decreases in food sales.

The ONS says:

The strongest sub-sector growth was from other non-food stores, which rose by 5.5% over the month to September 2024. Within “other non-food”, computer and telecommunications retailers had the strongest contribution to growth.

ONS senior statistician Hannah Finselbach explains:

“Retail sales grew in September as tech stores reported a notable rise in sales. These were only partially offset by a poor month for supermarkets, where retailers said bad weather and households continuing to cut back on luxury food items hit sales.

“Looking at the broader picture retail sales increased across the third quarter as a whole, with growth seen from all main shop types.”

The agenda

• Today: Chancellor Rachel Reeves holds talks with the bosses of major City firms

• 7am BST: UK retail sales for September

• 9.30am BST: UK insolvency statistics for September

• 1.30pm BST: US building permit and housing starts data for September