Partner Article

Confidence weakens as job creation falls

UK job creation fell to a three year low in June, indicating the presence of the highest levels of employer pessimism at any time since 2007.

Despite the recession, the British labour market has shown strong signs of resilience, and in recent months has witnessed a decline in unemployment. However, recent figures from KPMG and the Recruitment and Employment Confederation indicate that last month the number of permanent jobs fell at the sharpest rate in three years, as firms become increasingly concerned over the Eurozone debt crisis.

Equally, many now believe that the Conservative-led government deficit-reduction programme has held back economic growth.

Ian Stewart, Deloitte chief economist said: “The CFO survey underscores the connection between the macroeconomic environment and corporate behaviour.

Many large firms feel threatened by the breakup of the Euro, which has directly affected CFO’s decisions to hire over the coming year.

Figures from the survey indicate that 36% of respondents feel that at least one country will leave the Eurozone, up from 26% over the last quarter.

Following the increasing pressures from the Eurozone, it is likely that the Government will take active steps to revive growth and match Bank of England efforts to stimulate the economy. Last week the Bank announced plans to inject a further £50 million in Quantitative Easing into the UK economy.

This was posted in Bdaily's Members' News section by Ruth Mitchell .