The most recent CIPD/KPMG Labour Market Outlook (LMO) has shown that demand for staff within the private sector has begun to stabilise. Both the scale of redundancies and the number of planned redundancies have reduced over the past quarter. By contrast, employer pessimism continues in the public sector. Pay increase expectations have also fallen below the rate of inflation.

Andrew Smith, KPMG Chief Economist commented, “Despite the recent flurry of more upbeat economic news, many firms still lack confidence in the recovery and continue to expect tough times ahead. Most striking is the large number of firms planning to defer or cancel pay reviews. This conservative approach indicates that business remains unconvinced that current economic green shoots will lead to sustainable healthy growth in the near term. Expectations that pay increases will fall below the rate of inflation, resulting in a reduction in real earnings, will be a further concern and could stifle any consumer led recovery.”

Recruitment and Employment Confederation (REC) director of external relations, Tom Hadley, spoke of the job market for temporary workers: “The employment landscape remains volatile at best but life is slowly returning to the temporary work market. The rate of contraction for temporary and contract work has eased to the slowest in 10 months and flexible working options will continue to provide a crucial outlet for both job-seekers and employers over the coming months. With the government currently considering how best to implement new EU regulations on agency work, it will be vital to ensure that the new legislation does not negate this positive contribution and clog up this key route into work for thousands of workers.

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