British employers cut hiring faster in May, according to a survey the Bank of England watches, as war in the Middle East and political turmoil at home strain the labour market. This slowdown follows a decline in consumer confidence and tightening credit conditions that have tightened hiring budgets across sectors for firms nationwide throughout January.

The survey, flagged by the Bank of England, highlighted that employers are trimming staff numbers more aggressively than in previous months, a trend that may dampen wage growth and consumer spending. The back‑of‑the‑envelope figures suggest that the UK job market could remain fragile ahead of the next fiscal review for policy makers and analysts today.

Business leaders warn that continued uncertainty could push firms to delay capital projects and expansion plans, tightening the overall investment climate. The REC report points to a need for tighter fiscal policy to counteract these headwinds, noting that even modest improvements in the political environment could lift hiring momentum in the near term soon after.

Investors should monitor the Bank of England’s policy meetings for cues on interest rates, as higher rates could further constrain hiring. Firms facing a tighter credit environment may need to reassess workforce plans, while sectors most sensitive to consumer demand could see the sharpest declines. The REC’s findings underline the fragility of the labour market.