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Round-up of the week

Posted on 7th August 2015

The number of permanent and temporary staff placements continued to go up last month, albeit at a slower place.

Permanent and temporary staff placements continue to increase

Last month saw a further increase in the number of permanent and temporary staff placements across the UK, new figures have revealed.

However, data from the Recruitment and Employment Confederation (REC) and KPMG showed that the rate of growth in both areas is moderating. 

Kevin Green, chief executive of the REC, pointed out that while demand for staff is still strong, the labour market is "tightening" and some sectors are finding positions hard to fill.

"As students wait in anticipation of A-level results next week, the focus for business and government has to be on making sure that people entering the workforce have the best opportunities to succeed," he commented.

"Businesses need to be prepared to hire staff with potential and invest in their development."

Business community responds to interest rate freeze

The Bank of England's Monetary Policy Committee (MPC) this week decided to keep interest rates on hold for another month at their record low of 0.5%.

This decision has been welcomed by many business leaders, with the British Chambers of Commerce saying it would have been "imprudent" to raise rates at a time when the economic recovery is still "in need of care and encouragement".

John Longworth, director general of the body, accepted that interest rates will eventually have to go up, but said this should only be down slowly and steadily.

"Until that moment, the Bank of England is right to keep interest rates at current levels," he commented.

Mr Longworth added that the MPC has shown "composure and sound judgement in keeping rates unchanged".

The Institute of Directors (IoD), meanwhile, stated that another rate freeze suggests the Bank of England is "clearly worried about underlying economic weakness facing the UK".

Economic analyst Michael Martins said this is despite "welcome statistics" such as an increase in productivity, wage growth and low unemployment. 

He pointed out that the IoD has been advocating small and gradual rate rises for some time, but stated the MPC has made it clear this week "that it won't be making its move soon".

Bank of England forecasts economic growth

The UK economy has been tipped to grow by 2.8% during 2015 by the Bank of England.

According to the body's latest forecasts, this will be followed by a 2.7% increase in GDP in 2016 and an upturn of 2.6% a year later.

David Kern, chief economist at the BCC, said the positive predictions are "good news for business confidence", particularly as the Bank has indicated it will not rush to hike up interest rates.

He pointed out that while the Bank's growth forecasts are more favourable than its own, they nevertheless back up its view that higher growth remains consistent with low inflation.

As a result, Mr Kern believes it is "reassuring" that inflation is set to be below the 2% target by the end of 2016.