UK employers turn to temporary staff as COVID crisis mounts again

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A man wearing a face mask crosses a road laid out with social distancing barriers in the City of London financial district amid the outbreak of the coronavirus disease (COVID-19)

LONDON (Reuters) - British employers cut their hiring for permanent positions for the first time in three months in October and relied increasingly on temporary staff in the face of a second wave of coronavirus restrictions, a survey showed on Thursday.

The growing number of people looking for work pushed down starting pay, and the number of vacancies posted by companies seeking to hire workers fell slightly, the Recruitment and Employment Confederation (REC) and accountants KPMG said.

Firms appeared better prepared to operate through the new restrictions than they were in March, but the outlook was concerning, REC Chief Executive Neil Carberry said.

"We face a challenging winter and temporary work will be a vital tool for keeping businesses going and people in work," he said.

The REC/KPMG measure of temporary hiring hit its highest level since December 2018.

To slow a rise in unemployment, Britain's government on Saturday extended for one month its broad job subsidy programme, which pays 80% of the wages of temporarily laid-off employees, after ordering a new four-week stay-at-home lockdown for England which begins on Thursday.

"While the furlough scheme extension may give a brief respite, it will fuel economic uncertainty and further dampen prospects for job-seekers, hitting hiring activity hard," James Stewart, vice chair at KPMG, said.

The Bank of England is expected to increase its already huge, 745 billion-pound bond-buying stimulus on Thursday as it seeks to cushion Britain's struggling economy against the hit from a second coronavirus lockdown.

(Reporting by William Schomberg, editing by David Milliken)