Eurozone crisis blamed for gloomy jobs market
Jobseekers in the UK have a rocky time ahead of them, with businesses expected to put expansion and recruitment plans on hold for the foreseeable future, according to new research.
The latest quarterly survey by the Chartered Institute of Personnel and Development warns that the UK jobs market is facing a “slow, painful contraction”.
The survey of 1,000 employers suggests that situation will worsen for the remainder of 2011 and remain poor for the medium term.
Growth in the private sector is expected to slow down over the next three months and public sector confidence is also expected to remain low and to worsen next year.
Although new recruitment will slow down, the CIPD did suggest that global economic uncertainty makes it less likely that UK jobs will be outsourced abroad.
Mark Hoban, the financial secretary to the Treasury, attributed the gloomy prospects to the ongoing crisis in the eurozone, although Labour has been quick to point out that unemployment was rising before problems in the eurozone became apparent.
Despite predictions of difficult times ahead, Mr Hoban said that the government will continue to push ahead with its deficit reduction plan.
It will, however, publish further plans to generate economic growth in the UK at the end of this month
Gerwyn Davies, the CIPD’s public policy adviser, said: “Many firms appear to be locked in wait and see mode, with some companies scaling back on all employment decisions against a backdrop of increasing uncertainty as a result of the eurozone crisis and wider global economic turmoil”.
Meanwhile, former Labour Prime Minister Tony Blair today warned that a breakup of the eurozone would be ‘catastrophic’ and that the current crisis is the worst ever faced by the economic and monetary union.
Mr Blair is calling for the ‘whole weight of Europe’ to support the single currency and to help resolve debt crisis which is threatening the future of the eurozone.