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Unemployment ‘could hit 3 million’ due to Eurozone uncertainty

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09/07/2012
Uncertainty over the outcome of the Euro area debt crisis is influencing the UK jobs market, as employers take longer to hire new people.

The number of permanent jobs saw a sharp drop in June as employer confidence is eroded by the Eurozone crisis, according to a new report.

The Recruitment and Employment Confederation (REC) and KPMG jobs survey showed that the number of permanent placements fell at the sharpest rate in almost three years in last month. The permanent job placement index fell to 48.6 points, from 51 in May.

Bernard Brown, head of business services at KPMG added: “The real worry is that the acceleration in the pace of decline suggests this isn’t a mere blip – if this trend were to continue, there’s a very real chance we could hit a 3 million unemployed figure in the UK in the not too distant future.”

The Eurozone crisis is also said to have hurt employer confidence, with many employers taking longer to make decisions over hiring. The number of temporary placements have also declined for the seventh month, while average salaries for both permanent and temporary employees remained more or less unchanged.

REC chief executive Kevin Green said: “A decrease in hiring activity means we could see a period of increased unemployment, especially as a new wave of school leavers and graduates will be entering the labour market over the summer.”

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