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| Employment growth rate to slow slightly, says survey | Employment growth rate to slow slightly, says survey |
| (about 5 hours later) | |
| The Chartered Institute for Personnel and Development (CIPD) says the recent fast growth in employment is likely to slow in the coming months. | The Chartered Institute for Personnel and Development (CIPD) says the recent fast growth in employment is likely to slow in the coming months. |
| It surveyed 1,000 employers and found just over half of firms - 54% - said they would be increasing payrolls, down from 65% last year. | |
| One in five said they would shed workers in the first three months of this year. | One in five said they would shed workers in the first three months of this year. |
| The official jobless rate has fallen fast in recent months, to 7.1% now. | The official jobless rate has fallen fast in recent months, to 7.1% now. |
| The Bank of England had expected unemployment to fall far more slowly, saying it would not consider lowering interest rates until the level had fallen to 7%, | The Bank of England had expected unemployment to fall far more slowly, saying it would not consider lowering interest rates until the level had fallen to 7%, |
| However, the swifter fall in the rate has prompted the Bank to abandon that as a target for rate-setting as it believes, despite the improvement in the jobs picture, the economy remains too fragile to withstand higher borrowing costs. | However, the swifter fall in the rate has prompted the Bank to abandon that as a target for rate-setting as it believes, despite the improvement in the jobs picture, the economy remains too fragile to withstand higher borrowing costs. |
| The CIPD also found that pay rises were unlikely to outstrip inflation, something that is needed to restore living standards which have been eroded by rising prices, particularly in the cost of energy and food. | The CIPD also found that pay rises were unlikely to outstrip inflation, something that is needed to restore living standards which have been eroded by rising prices, particularly in the cost of energy and food. |
| Inflation | Inflation |
| Almost three in four firms said they expected pay rises to be 2% or lower this year. | Almost three in four firms said they expected pay rises to be 2% or lower this year. |
| Inflation has only just fallen to 2% after having been above that for more than four years. | Inflation has only just fallen to 2% after having been above that for more than four years. |
| If it remains at around this level, most pay rises will barely match the increase in average prices. | If it remains at around this level, most pay rises will barely match the increase in average prices. |
| Gerwyn Davies, of the CIPD, said that it appeared that jobs growth had come ahead of economic growth. | Gerwyn Davies, of the CIPD, said that it appeared that jobs growth had come ahead of economic growth. |
| He said: "Employment growth, normally a lagging indicator of recovery, seems to have preceded the stronger signs of growth we're now seeing. | He said: "Employment growth, normally a lagging indicator of recovery, seems to have preceded the stronger signs of growth we're now seeing. |
| "Weak productivity partly explains why a majority of employers expect to continue awarding below-inflation pay rises for their workforce. Sustainable increases in real wages can only be delivered if organisations can boost productivity, for example, through smart investment in the training, development and management of their staff." | "Weak productivity partly explains why a majority of employers expect to continue awarding below-inflation pay rises for their workforce. Sustainable increases in real wages can only be delivered if organisations can boost productivity, for example, through smart investment in the training, development and management of their staff." |
| The latest official employment figures will be released on Wednesday, | The latest official employment figures will be released on Wednesday, |