The managing economist at the CEBR, Charles Davis, has cautioned umbrella company contractors that whilst the economy in the UK is recovering, the recovery is not yet robust.
We are still in the early stages of improvement and everybody must be aware that the government’s tight fiscal policy controls are coming into play almost immediately, he said.
The Monetary Policy committee meets this week to decide if the Bank of England interest rate is to be maintained at its historic low rate of 0.5%. Davis believes that interest rates will remain at this unprecedented low for the immediate future.
Recruitment demand for new employees remained unchanged in June, as did salaries, according to the Reed Job Index published on Monday. The Index is based on the reed.co.uk job board which is the largest in the UK. Every day more than 90,000 vacancies are advertised on the job board from 8,000 recruiters covering 37 career sectors.
Job demand is highest in the media, digital and creative sectors and vacancies for sales and qualified accountancy staff reached record highs last month. The financial and business sectors have also shown increased demand.
On the other hand, vacancies in the strategy and consultancy, marketing and PR and voluntary sectors, fell back from the highs seen in May. And as expected demand in the public sector fell after the job freezes announced in the budget. Yorkshire and Humberside and the East Midlands recorded an increase in demand whilst London and the South East saw demand drop.
Reed.co.uk’s MD, Martin Warnes, said that although green shoots of recovery are now visible, the jobs market appears to have held its breath last month.
The Markit/CIPS Business Activity Index showed that the service sector experienced its slowest growth rate for nearly a year last month. A senior economist at Markit said that the latest results were worrying and although we are hoping to see a slight rise in GDP for the second quarter, this may already be a peak in the recovery cycle.
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