Britain’s jobs market showed further signs of cooling last month and employers increased pay more slowly, according to a survey which will form part of the Bank of England’s discussions about when to cut interest rates again.

The Recruitment and Employment Confederation said permanent hiring extended a nearly two-year downturn although the drop was less marked than a month earlier, and pay increases were weaker than in June.

For temporary staff, the pace of pay increases was the weakest in nearly three and a half years, REC – which produces the survey with accountancy firm KPMG – said.

“Businesses may be cautious to hit go on their full recruitment and investment strategies until they have heard more from the Chancellor in her Autumn Budget,” Jon Holt, chief executive of KPMG in the UK, said, referring to finance minister Rachel Reeves’ Oct. 30 fiscal statement.

The survey was conducted between July 11 and July 25, after the July 4 election won by the centre-left Labour Party but before the BoE on Aug. 1 cut interest rates for the first time since 2020, having raised them to a 16-year high.

The BoE is watching pay growth as part of its assessment of inflation pressures in the economy.

(Writing by William Schomberg; editing by David Milliken)