Unemployment likely to rise as recovery falters

The recovery in employment levels has "stalled", with a growing number of employers planning to make staff redundant.

A survey of 600 employers, published today, found that a third expected to cut jobs in the next three months, the worst figure for a year and up from one in four at the end of 2009.

The Chartered Institute of Personnel and Development said more public sector employers were planning redundancies than in private firms.

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Gerwyn Davies, public policy adviser at the institute, said: "The employment situation looks like a case of the good, the bad and the ugly. Most striking this time is that, while the number of employers planning to make redundancies is similar to that in the spring report, this trend masks the true extent of forthcoming job losses in the third quarter of the year as the proportion of the workforce that will be affected by these redundancy programmes has jumped by 50 per cent.

"As is being widely reported, this is being driven chiefly by public sector organisations, where redundancies will affect almost eight per cent of the workforce on average."

The institute expected employment to be stable, on balance, in the coming months but the medium-term outlook was likely to be weaker than forecast.

The institute believed "that a rise in unemployment in the next two years remains a distinct possibility as the private sector recovery is offset by the 600,000 public sector job losses the Government expects over the next five years."