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Confidence on the rise but businesses 'still cautious about hiring'

11 Nov 2013

British businesses are reluctant to increase their staffing levels in the medium-term, despite recent reports that confidence in the UK economy is strengthening.

According to a new survey by the Chartered Institute of Personnel and Development (CIPD), the short-term outlook for jobs is positive, with the majority of employers planning to take on more staff in the coming weeks.

Although employer confidence in the three months to October reached its highest level in the survey's eight-year history, the CIPD reports that attitudes to hiring in the medium-term are not so optimistic.

Just 17% of the 1,020 firms questioned said they would increase staffing levels by more than 2% if economic output reached a similar figure, while 42% said they would not change their headcount at all.

The CIPD suggests that job prospects are brightest in the manufacturing and retail sectors, as well as in the south-east of England. But the human resources body warns that employment could actually fall in the public sector and the north of the country.

‘Our data on medium-term recruitment intentions suggest that stronger economic growth in the next few years will not be accompanied by big rises in employment,’ said Gerwyn Davies, labour market advisor at the CIPD.

‘Instead, many employers tell us they are focused on the need to raise productivity. The prospects of better economic conditions might therefore persuade them to invest more in the business and make more intensive use of existing staff, for example, by increasing working hours.’

The rate of unemployment in the UK currently stands at 7.7%.

The Bank of England has said that it will not raise interest rates from their all-time low of 0.5% until unemployment falls to 7%.