Austerity measures, announced in the Chancellor’s June Budget, have hit employers’ hiring plans, according to Chris Williamson, chief economist at financial information services company Markit.

Yesterday the governor of the Bank of England predicted a “choppy recovery”, adding that the rate of growth for Britain’s economy would be lower than previously expected in 2011.

Williamson told Recruiterthat concerns around the Chancellor’s tightening of the purse strings as well as imminent public sector job cuts have ensured that firms are now beginning to hold back on recruitment especially of permanent full-time staff.

“The employment figures showed a big move to the use of part-time workers. There is a general air of uncertainty so companies are reluctant to commit to full time contracts.

“Those countries where austerity measures are kicking in, which includes the Eurozone and the UK, are cooling domestic demand. The hope was that external demand would boost demand through trade. Global trade is beginning to slow, while austerity measures kick in here, which risks a larger slowdown than we were hoping for.

“Private sector employers have become more reluctant to take on staff. Although trade is slowing, the manufacturing sector is the main area of growth. That is where the bulk of the jobs are being created. The services sector, which is the most labour intensive part of the UK economy, shows renewed weakness and construction is also being hard hit.

“There is still scope for growth. I don’t think we are in a double-dip scenario. Business has reigned in their expectations of revenue and also what they will be able to do in terms of recruitment and investment.

“This was always going to be a bumpy recovery. Compared to earlier in the year amid buoyant predictions for the economy, expectations have been subued by the austerity measures in the budget.”