UK housing market recovers, job recruitment is robust

The UK economy appears to be bouncing back from the initial post-Brexit vote shock, according to new recruitment and housing market data.

The Recruitment and Employment Confederation, which said last month that hiring was in “dramatic freefall”, just reported that in August permanent appointments rose for first time in three months, temp billings increased at the fastest pace since May and permanent salary growth quickened.

The most sought-after category for permanent staff in August was nursing and medical, followed by engineering. The only category where a drop in demand was reported was construction.

REC Chief Executive Kevin Green said:

“The UK jobs market returned to pre-referendum patterns in August as the initial shock of the vote result subsided. Permanent hiring returned to growth as employers confirmed appointments that had been on hold or delayed in June and July. Starting salaries also improved, with employers having to offer more to attract candidates who might be reluctant to move jobs in the current climate.”

Housing market beginning to settle

A separate survey by the Royal Institution for Chartered Surveyors revealed that the housing market is beginning to settle down after the initial shock following the EU referendum vote.

The RICS house price index increased to +12 in August, from a three-year low of +5 in July. Although the August reading is one of the lowest in the past year, it is the first increase in six months.

For the first time since April, price expectations over the next three months nationally moved into positive territory – with 10% more respondents anticipating an increase over the period.

“During August, 12% more respondents nationally reported an increase in prices, up from +5% in July,” RICS said in its survey.

“Although this reverses a run of five consecutive surveys in which the net balance has decelerated, from a high of 50% in February, it is still the second weakest reading over the past eighteen months.”

The new data echoes other better-than-expected readings of economic activity in Britain.

Last week, the IHS Markit’s PMI surveys for services, manufacturing, and construction all bounced back after severely declining in July.

The figures prompted Credit Suisse and Morgan Stanley to scrap UK recession calls in the second half of the year.