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Saturday 27th of September 2008
December 31, 2007

Gloomy outlook for the UK job market


by Kay Murchie
”Gloomy

The Chartered Institute of Personnel and Development (CIPD) is predicting a net rise in employment of 75,000 in 2008, a third of the rise forecast in 2006 and 2007.

The employment organisation said prospects for the UK job market is at its worst for 10 years and anticipates that employment will rise by approximately 150,000 to 1.8 million or 5.8% of the workforce.

John Philpott of the CIPD said 2008 will easily be the worst since the Labour Government came to power a decade ago. Mr Philpott added that in the last 2 years, a downward trend in public sector employment has in turn been more than offset by rising numbers of private sector jobs.

Mr Philpott also warned that the slowdown in the job market could prompt larger cuts in interest rates than currently anticipated and prolong the effects of the economic downturn into 2009.

It is estimated that the majority of the job losses will be in financial services which is facing a direct hit from the ongoing credit squeeze. In October, the Centre for Economics and Business Research, said that it expected 6,500 jobs to be lost in the City of London financial district during 2008 with cutbacks most felt in investment banking.

As a result of the credit squeeze, an increasing amount of credit card applications are being rejected and those in financial difficulty could find that their options are becoming limited.

The Institute of Directors (IOD) added that the economy was entering the most uncertain economic period for 15 years. The IOD said persistent inflation could prevent the Bank of England from cutting interest rates as much as it would like in order to cushion against slower growth.

Graeme Leach of the IOD said much weaker growth and stubborn inflation will be the UK economic story for 2008. The years of plenty look as though they have come to an end.

A recent survey by recruitment firm Manpower established that UK employers were set to take on new staff at their slowest rate in 6 years following the credit squeeze.

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