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The ongoing global credit crunch is beginning to impact upon the labour market and could result in future job losses, new research has warned.

According to the latest report on jobs by accountancy firm KPMG and the Recruitment and Employment Confederation (REC), the growth in the number of people placed in permanent positions fell to a 13-month low in October.

The report's index for permanent placements fell from 60.2 to 57.4, its lowest level since September 2006.

In contrast temporary billings rose at the fastest pace for three months, a possible sign that economic turmoil is leading companies to take on staff on a short-term, rather than long-term basis.

Growth in the demand for permanent staff also eased slightly in October, with the index for permanent staff vacancies dropping to a 17-month low of 60.2 – down from 60.6 in September.

Commenting on the results of the survey KPMG director Alan Nolan said: "The credit crunch begins to casts its shadow over the job market with the lowest growth in permanent placements for 13 months and the slowest pace for demand in permanent staff for seventeen months.

"If this trend continues, we may see job losses across the sectors which are particularly volatile," he warned.

Mr Nolan added that employers should look at how they could reduce their employment costs in order to limit the number of jobs lost and minimise the impact of the credit crunch on their business.

The Bank of England's monetary policy committee (MPC) is likely to assess the current state of the labour market in making its latest interest rate decision.

But despite growing fears that the economy is weakening, analysts believe the MPC will announce tomorrow that it has decided to keep the UK's benchmark interest rate on hold at 5.75 per cent – with the committee's desire to keep inflation in check likely to drive its decision.

Today's report on jobs says that while skill shortages have driven staff salaries up further, pay inflation remains well below July’s nine-year peak.