Jobs warning for new year

28-12-2007

Jobs warning for new year
Next year could see fewer jobs created in the UK as the economy slows down, an employment body has warned.

With the credit crunch continuing to create an uncertain outlook for businesses the Chartered Institute of Personnel and Development (CIPD) is predicting a slow 2008 for employment.

It suggests the private sector will see fewer new positions created and the country will experience a marked turnaround in employment trends.

Britain is currently enjoying a period of low unemployment but, although not predicting a recession, the CIPD suggests that is likely to change.

John Philpott, the CIPD's chief economist, has forecast the number of jobs will continue to rise but the rate of growth will be much slower.

"We been used over recent years to be adding quite a lot of jobs to the UK economy but with the slowdown that we're expecting next year there won't be as many jobs created," Mr Philpott told the Today programme.

"We still don't think there'll be a recession, but even so things are going to feel a lot tougher than they have of late."

Mr Philpott said "a number of factors" will be responsible for this slowdown, including the ongoing credit crunch and the after-effects of interest-rate increases earlier this year.

"Inflation is rising, so a lot of businesses are facing higher costs and they're going to be trying to cut back in labour to compensate for that," he added.

"And of course a big factor is that whereas in previous downturns this decade the government has been adding jobs to the labour market this time public sector employment is actually falling."

He said: "We still think that because the Bank of England's going to be cutting interest rates during the course of next year that the economy should avoid recession, and so the news isn't going to be disastrous.

"But clearly it's going to be a difficult year and there is still a lot of uncertainty around and there is still a possibility that we might see a recession. If that were to occur then the jobs outlook would be even worse that what we're expecting."

The CIPD's prediction comes after the TUC warned 2008 would be a "rocky year" for the British economy.

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