Unemployment to rise as employers ‘wait and see’
The job market in the UK faces a “slow, painful contraction” as employers hold back on recruitment, warns the Chartered Institute of Personnel and Development.
Unemployment will increase by the end of the year and in the medium term because of the eurozone crisis and global economic turmoil, the report said.
Employers are locked into a “wait and see mode”, which has resulted in recruitment freezes and a significant reduction in the number of companies outsourcing work overseas.
The Chartered Institute of Personnel and Development‘s quarterly survey of 1,000 employers found that the private and public sectors will grow at a slower pace over the next three months.
The CIPD think tank also warned that there have been more redundancies in the public sector than predicted.
Unemployment rise ‘inevitable’
Gerwyn Davies, public policy adviser at the CIPD, said: “The figures point to a slow, painful contraction in the jobs market.
“The good news resulting from this lull in business activity is that fewer employers are looking to relocate abroad or make redundancies.
“The downside is that recruitment intentions are falling, which will make further rises in unemployment therefore seem inevitable given that public sector job losses are outpacing the predictions made by the Office for Budget Responsibility.”
UK unemployment reached a 17 year high last month. The most recent unemployment figures released on Wednesday will show whether the youth jobless total has gone over a million people.