Growth in employment to slow as firms lose confidence

Mon, 17/02/2014 - 12:52 -- nick

The monthly unemployment numbers are out this week, and they are likely to show a slowdown in new UK jobs.

The Chartered Institute of Personnel and Development (CIPD), which surveys employers on their staffing needs, says that there has been a drop in those saying they will be taking on new workers to 54%.

Last year 65% agreed with this, while one-in-five said they would be getting rid of employees in the next three months.

Recent big falls in unemployment mean the rate is now 7.1%, but many of the jobs created are low-waged, part-time or on zero hours contracts.

In a further blow to both working and workless people, around three-quarters of employers have confirmed that they will be giving pay rises below the rate of inflation, suggesting that the UK's financial troubles are likely to continue with too many citizens receiving poverty-level wages.

This is likely to be made worse by the fact that the basics which make up a big proportion of low-paid - and unemployed - people's spending, including food and energy, have been rising faster than the wider inflation rate.

Gerwyn Davies, of the CIPD, said jobs growth seemed to have come ahead of economic growth:

"Employment growth, normally a lagging indicator of recovery, seems to have preceded the stronger signs of growth we're now seeing.

"Weak productivity partly explains why a majority of employers expect to continue awarding below-inflation pay rises for their workforce. Sustainable increases in real wages can only be delivered if organisations can boost productivity, for example, through smart investment in the training, development and management of their staff."

Unemployed people need a buoyant jobs market that pays living wages, and the UK's has not consistently been delivering this across all regions.

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