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UK employers optimistic about jobs market

Olympic games could help drag the country out of recession and into recovery.

A survey of 2,100 UK employers conducted by recruitment firm ManpowerGroup found that the country’s jobs market may be back in positive territory after a depressing winter, with a national positive outlook of 2 per cent.

The survey asked whether employers intended to hire or reduce workforce in the upcoming quarter, and reveals that they are taking tentative steps in the right direction.

Mark Cahill, managing director of Manpower UK, said:

Although it’s too early to say that a full-blown recovery is upon us, it does feel like we’re turning a corner when it comes to the jobs market. Businesses that were battening down the hatches in the last quarter appear to be considering taking on staff.

The survey -- used as a key economic statistic by both the Bank of England and the UK government -- finds that employer confidence is growing in London despite a wave of redundancies in the financial sector. A key factor in employer confidence is positive sentiment around the Olympic Games.

The net employment outlook of +7 per cent is notably stronger than the average outlook of 0 per cent between 2009 and 2011.

Cahill added:

The upswing in positive sentiment among employers in London is very encouraging. We are seeing thousands of positions become available thanks to the Olympic Games. Whilst it’s undoubtedly true that many of these jobs will be temporary lasting only for the summer, we shouldn’t underestimate the impact that an upturn in attitude can have on the psyche of the nation as a whole. This Olympic effect could well help drag us out of recession and into recovery.

Outside of London, the picture remains mixed across the UK. Net employment outlooks in the neighbouring regions of the South East and East of England have both dipped into negative territory for the first time in more than two years and, like the Outlook in Wales, sit at a reserved -1 per cent, according to the survey.

Meanwhile, employers in the North East report the least optimistic regional forecast, with an outlook of -6 per cent. The most optimistic region is the East Midlands, with an outlook of +10 per cent, whereas the region showing the strongest improvement is the North West, where the outlook has improved from a negative outlook of -5 per cent in Q1 to +6 per cent this quarter.

The recruitment firm’s research shows that the UK labour market, construction sector are not encouraging for hiring. Few sectors like finance and business services, the wholesale and retail, restaurants and Hotels also look negative for hiring.

Cahill concluded:

It’s disappointing to see the construction forecast so poor. The appearance of cranes in a city skyline is often cited as a symbol of economic recovery, and if this recovery is to gain real momentum we will need to see sectors such as Construction begin to perk up later on in 2012.


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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.