Page last updated at 07:04 GMT, Friday, 31 October 2008

Employers predict redundancy rise

People walking
Employers are predicting a sharp rise in redundancies

Employers predict a sharp rise in redundancies brought on by the current financial crisis.

A Chartered Institute of Personnel and Development survey says older workers will bear the brunt of job losses.

The survey also says many employers had been hanging on, hoping the economy would pick up so they could avoid making redundancies.

CIPD chief economist John Philpott said interest rates should be cut further to boost business confidence.

"The onset of recession is already putting jobs at risk but many more are in the firing line as employers consider their next move in a fast deteriorating situation," Mr Philpott said.

'Nightmare scenario'

He called for the Bank of England to cut interest rates further "to prevent a nightmare scenario for jobs".

Earlier this month, the central bank cut interest rates to 4.5% from 5% in a co-ordinated global move and will meet next week to decide whether to cut the cost of borrowing again.

The turmoil surrounding the banking world and subsequent turbulence in the financial markets is making for an uncertain time
Rachael Joy, GFK NOP

The recent economic downturn has led many employers to draw up contingency plans for job losses, the survey suggests.

A quarter of the 721 organisations surveyed said they had prepared fresh plans for redundancies, with most planning to cut any jobs by the end of January.

Older workers appear to be particularly at risk.

One in five employers said they would take advantage of the rules which allow them to make workers aged over 65 redundant, without having to provide a business reason.

Confidence ebbs

The financial crisis and threat of job cuts is also making consumers reluctant to spend.

Research company GfK NOP said its consumer confidence index slipped to -36 in October from -32 in September.

"The turmoil surrounding the banking world and subsequent turbulence in the financial markets is making for an uncertain time," said Rachael Joy from GfK's consumer confidence team.

"Consumers are not at all confident about buying major purchases as rising food and energy bills leave them increasingly worried about keeping up with payments."

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