Sharp rise in job losses forecast by survey

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Jobcentre in Glasgow
Image caption,
Unemployment in the UK stands at almost 2.5 million according to latest official figures

Redundancies are set to rise sharply in the next few months as public sector cuts bite, a survey has suggested.

The Chartered Institute of Personnel and Development study found redundancy intentions with employers were at their highest level since it began in 2004.

Four out of 10 organisations planned redundancies in the first quarter of this year, the survey discovered.

These included one-third of NHS employers, half of central government and three-quarters in local government.

The organisations affected typically proposed to cut about one in 10 employees, increasing to one in eight in the public sector.

Time of reckoning

But there is hope that job creation in the private sector will bring some relief elsewhere.

The institute's policy adviser, Gerwyn Davies, described the next few months as a "quarter of reckoning" for the jobs market and a relapse from the recent recovery.

He said it was encouraging that private sector employment was expected to keep growing, but nonetheless the institute believed unemployment would continue climbing until 2012.

Some business organisations have argued that job creation in the private sector will be able to offset job losses in the public sector caused by government spending cuts.

However, the CIPD study questions this analysis. Richard Jeffrey, chief investment officer at Cazenove Capital Management, told the BBC that the CIPD was likely to be proved right.

"The economy needs to grow at a rate of about 2% a year to create jobs in the private sector. It's not yet growing at that rate and I don't think it will grow at that rate this year," he said.

He added we could see growth of 2% next year, or possibly not until 2013. "Unemployment is not going to trend downward until [then]," he argued.

BBC employment correspondent Martin Shankleman says the survey captures the moment when many job losses threatened across the economy seem about to become reality.

UK unemployment rose by 49,000 to almost 2.5 million in the three months to the end of November, according to the latest Office for National Statistics figures.

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