LONDON, Nov 8 Reuters Britain39;s labour market showed further signs of cooling last month, according to a survey that showed the weakest wage growth since early 2021, and tax increases in last week39;s budget might further hit hiring.

The Recruitment and Employment ConfederationKPMG said its gauge of starting pay for permanent roles slowed to 52.5 in October from 52.8 in September for its weakest level since February 2021 during the coronavirus pandemic.

REC39;s permanent placements index fell to 44.1 from 44.9 in September and the rate of contraction was the steepest since March. The survey said firms held off hiring amid uncertainty in the leadup to the new Labour government39;s budget.

There is little in the pay data in todays report that suggests the Bank of England should step away from further cuts to interest rates, which will also boost business confidence, REC chief executive Neil Carberry said.

The BoE, which is watching pay growth closely as it tries to gauge how much inflation pressure remains in the economy, reduced borrowing costs by a quarterpoint to 4.75 from 5 on Thursday. It said further cuts were likely to be gradual.

REC said vacancies fell for the 12th month in a row, suggesting less demand for staff, and the number of available candidates for jobs rose for the 20th successive month with businesses reporting the sharpest pace of increase in temporary staff availability in nearly four years.

Jon Holt, group chief executive at KPMG, said…