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Recruitment sector slowing down

The Recruitment and Employment Confederation and KPMG permanent placements index fell from 63.2 in April to 61.3 in May as the slowdown in the sector continues. The index hit a 12 year high of 65.2 in March although there are serious concerns in the short term regarding the almost inevitable mass redundancies expected in the public sector.

Even though the number of job vacancies in the UK continues to rise the increase is at a far slower rate than that seen in early 2010. This is even before the public sector budget crisis is tackled which is inevitably going to lead to a massive reduction in the overall budget. The UK government is looking to slash at least £60 billion from the current budget although with interest charges approaching £70 billion a year by 2015, more budget cuts will be required.

The recruitment sector is often a very strong indicator of underlying economic activity because many companies will look at short-term employment positions prior to committing themselves to longer-term roles. If this is the case then it looks as though the UK economy is going to struggle in the short to medium term, something which many analysts would readily agree with.

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