UK job prospects will deteriorate less slowly in the final quarter of 2009 than at any time since the start of the recession but the stricken labour market is displaying no signs of returning to proper health, according to the latest (autumn 2009) quarterly CIPD/KPMG Labour Market Outlook (LMO)survey.

The survey reports a negative balance of -3% between the percentage of employers expecting to hire further staff in the three months to December 2009 and the percentage expecting to employ fewer, representing an improvement on negative balances of -19% and -10% in spring and summer’s LMO surveys respectively. 

Gerwyn Davies, public policy adviser at the Chartered Institute of Personnel and Development (CIPD), says: “The UK jobs market remains flat on its back. Things aren’t anywhere near bad as they were earlier in the year when redundancies spread through the economy like a virus. And with things looking up in one or two sectors there is mounting hope that the ongoing gradual decline in job prospects might run its course next year before unemployment reaches 3m.

“The patient remains seriously weak, won’t recover for several years even if a return to robust economic growth provides the necessary tonic and could easily relapse if the recovery is as fragile and anaemic as many economists fear.” 

Andrew Smith, chief economist at KPMG, adds: “This recession has come through not only in job losses but also in greater labour market flexibility - reduced working hours, pay freezes and outright wage cuts.

“The decline in average pay settlements, expected to fall to a record low of 1.5%, suggests that underlying inflation pressures continue to weaken while the risk of deflation is rising - justifying the Monetary Policy Committee’s decision to extend its quantitative easing programme by £25bn.”