Job prospects to worsen, says study

A survey of 1,000 employers also revealed a further widening of a North-South divide in the jobs market, said the Chartered Institute of Personnel and Development (CIPD).

The difference between the number of employers intending to hire new staff and those warning of cuts has fallen to the lowest figure since the end of the last recession in 2009, the study showed.

The CIPD said the findings reinforced its prediction that unemployment could reach 2.85 million by the end of the year unless business conditions improved. The jobless total increased to 2.68 million last month and is expected to rise again when new figures are published by the Office for National Statistics on Wednesday.

According to the report, the worsening job prospects are almost entirely accounted for by a drop in confidence in the private sector, which the Government was hoping would create enough work to compensate for cuts in the public sector workforce.

Employment growth in manufacturing is set to stall, and fewer jobs will be created in the service sector, predicted the CIPD.

Almost a third of private sector service firms intend to make redundancies in the coming months, up from one in four at the end of last year, the research revealed. Access to finance and a shortage of skilled workers were among the barriers to hiring that were identified by employers.

Job prospects were brighter in London and the South of England, while firms in the North were less optimistic.

Gerwyn Davies, public policy adviser at the CIPD, said: "Whereas employers were in wait-and-see mode three months ago, more private sector firms, particularly among private sector services firms, have decided to push the redundancy button in response to worsening economic news. This will exert yet more pressure on a jobs market that is buckling under the strains of contractions in economic growth and public sector employment."

TUC general secretary Brendan Barber said: "Everybody's worst fears about rising unemployment and a new North-South divide are coming true. We were promised a private sector-led recovery but instead private sector workers are joining public servants in the dole queues."