Job crunch hits recession Britain
Job crunch hits recession Britain
Monday 10th November 2008
UK job creation is at a standstill as employers take a downbeat view of the economy.The Chartered Institute of Personnel and Development (CIPD)/KPMG Labour Market Outlook shows the balance of firms hiring against those cutting jobs is down to +2, compared to +41 a year ago.
Only one per cent of employers think economic conditions will improve. A total of 83 per cent expect the economy to deteriorate in the run-up to Christmas.
However, firms were more upbeat about their own prospects – with only a quarter expecting things to get worse.
Staff pay, excluding bonuses, is expected to increase on average by 3.5 per cent at the time of employers' next pay reviews.
CIPD chief economist John Philpott said: "The year since the impact of the credit crunch was first felt saw the UK labour market move from a state of buoyancy to one of stagnation.
"We are now at the start of a period of contraction, with jobs being lost, new jobs hard to come by and, as this week' official statistics are set to confirm, unemployment on an ever sharper upward rise."
He added with modest pay increases at best "the harsh chill of recession will make this the toughest winter for UK households for almost two decades".
A study by Recruitment and Employment Confederation and KPMG last week showed job vacancies has fallen to their lowest level in over a decade.
Currently, the UK unemployment rate stands at 5.7 per cent but the European Commission has predicted it will rise to over seven per cent in 2009.
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