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August 9, 2010    

UK jobs market recovery in danger of stalling

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by Gill Montia
UK jobs market recovery in danger of stalling

Cutbacks in the public sector will be impacting on UK jobseekers across all sectors between now and the end of the year, according to research from The Chartered Institute of Personnel and Development (CIPD).

The professional body has warned that employers are expecting to make an average 5.5% headcount reduction in the remainder of 2010, up from an estimated 3.6% in CIPD’s previous quarterly survey.

In the public sector, 36% of organisations questioned are expecting to cut staff and the size of the anticipated cuts are bigger than previously thought.

In the private sector, the majority of firms expect to be hiring new staff, keeping CIPD’s net employment index in positive territory but only by plus two, compared with plus five three months ago.

The index clearly shows strong hiring intentions among private firms, at +19, dragged down by the public sector, which registers -35.

CIPD public policy adviser, Gerwyn Davies, says the employment situation looks like a case of the “good, the bad and the ugly”.

He adds: “While the number of employers planning to make redundancies is similar to that in the spring, this trend masks the true extent of forthcoming job losses in the third quarter of the year.”

Mr Davies therefore sees a rise in unemployment over the medium term as a “distinct possibility” as the private sector recovery has to offset 600,000 public sector job losses, over the next five years.

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