Private sector will struggle to compensate for public jobs

The UK could be set to see rising unemployment as the private sector is not placed to cope with the job losses created by public sector spending cuts.

That is according to the Institute of Employment Studies (IES), which said the private sector is unlikely to see a recovery that will allow it to absorb the number of workers set to be laid off amid the cuts.

Dr Paul Sisson, research fellow at the IES, said: "More people in the public sector will find that they are made redundant and it won't just be a case of vacancies declining.

"If that is done quickly it seems quite unlikely that private sector growth would be sufficient to compensate for that."

The comments follow the latest report from the Chartered Institute of Personnel and Development, which revealed that many private sector employers expect to increase their hiring activity over the next three months, while public sector organisation can see appointments falling over the quarter.

10th August, 2010

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