Round-up of the weekPosted on 11th December 2015
Permanent and temporary appointments increase
The number of permanent and temporary appointments shot up during November 2015, new figures have revealed.
According to the Recruitment and Employment Confederation (REC) and KPMG, the rate of growth increased in both areas.
Indeed, the rate of permanent staff placements in November was the highest seen in seven months, while the increase in temporary/contract staff billings was the highest in five months.
Demand for staff also went up last month, although the availability of permanent and temporary staff declined. This might partly explain why salaries are on the up, as permanent staff wages and hourly pay rates for temporary and contract workers both increased.
Commenting on the findings, REC chief executive Kevin Green said: "Businesses are confident, with more people finding permanent jobs each month and pay increasing - this is a great way to cap a bumper year for the UK labour market.
“Such is the demand for staff that the availability of people to fill temporary roles has fallen at the sharpest rate in 18 years. In part this has been driven by businesses taking on additional staff for the Christmas period."
However, Mr Green stressed that skills shortages still exist in some sectors of the economy.
Interest rates remain on hold
The Bank of England's Monetary Policy Committee has opted to keep interest rates on hold at 0.5 per cent.
The cost of borrowing has remained at this record low since March 2009, although one member of the committee did vote for an increase in its latest meeting.
The British Chambers of Commerce (BCC) has welcomed the decision, saying it is not a surprise to see interest rates remain unchanged.
David Kern, chief economist at the body, commented: "Our own forecast suggests that any rate increase will be in the third quarter of 2016 at the earliest. Even though the US may raise rates this month, the European Central Bank has eased policy even further, and global headwinds persist.
"With inflation not expected to start edging up until next year or reach their target until well into 2017, there is simply no need for the bank to consider changing tack."
BCC downgrades economic forecast
The BCC has revised its economic growth forecast downwards, anticipating an upturn of 2.4 per cent this year, rather than 2.6 per cent. Similarly, its forecast for 2016 has been downgraded from 2.7 per cent to 2.5 per cent.
This downwards revision is being attributed to weaker than expected net trade and disappointing manufacturing figures, although the BCC stressed that the UK economy will still see moderate growth over the coming years. This will be driven by consumer spending and strong growth in the service sector.
Director general of the BCC John Longworth said: "The UK still needs to see a fundamental shift in its economic model if we are to remain relevant and prosperous in a changing world economy.
"Anyone who says that the job is nearly done needs to look again at the trade deficit, current account position and long-term business investment - and realise there’s still a long way to go."
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