Job fears rise

11/08/2008

Fears over future recruitment levels are on the rise ahead of this week's official government employment statistics.

The Chartered Institute of Personnel and Development (CIPD) and employment services company KPMG revealed more firms are planning job cuts.

Andrew Smith, chief economist, at the KPMG said: "The labour market is suddenly looking a lot less resilient."

"Companies are now reacting to deteriorating market conditions. With sales slowing and input costs rising, but scope to raise prices limited by weakening demand, finances are under pressure."

A joint study by the pair revealed less than a third thought they would increase staff and 27 per cent said they planned to lay off staff, up from 22 per cent in the second quarter.

Workers in legal jobs could see increased settlement claims if more people are forced out of work.

Mr Smith added employment costs are taking the strain "with employers seeking both to keep a lid on pay settlements and, in increasing numbers, planning for redundancies".

Unemployment reached an all-time low in 2007 and is now £1.62 million.

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