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CBI confident private sector will take up the slack

The CBI has today confirmed its view that the private sector is well-positioned to soak up the significant job losses forecast for the public sector. While this would seem to be at odds with the recent collapse of public services management company Connaught which suddenly collapsed due to a forecast reduction in public sector spending, maybe this was a special and unique situation?

While there is no doubt that public sector dependent companies will feel the pain in the short to medium term it is interesting to see that we have not seen any repeat of the Connaught situation as yet. That is not to say that we will not see some of the more financially stretched public sector dependent companies feel the pain but so far the expected domino effect after the Connaught situation has not materialised.

Whether the private sector is able to soak up the vast majority of expected job cuts in the public sector is a real matter for debate but ultimately if the private sector can make a dent in the expected job loss numbers this would be a big help. It is interesting to see that the CBI remains fairly buoyant regarding the UK economy and the outlook for UK unemployment in the short to medium term.

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