Cut rate call asjobfearsincrease

Oct 8 2008 Evening Gazette

AN increasing number of firms are preparing to make workers redundant because of the economic downturn amid a sharp drop in demand for staff and fresh evidence of the impact of the credit crunch on industry, a raft of gloomy reports showed today.

Union and business leaders have united to call on the Bank of England’s monetary policy committee to cut interest rates tomorrow to ease pressure on industry, which is already in recession, according to the British Chambers of Commerce.

The Federation of Small Businesses said a snap poll of 6,000 firms showed most had seen their operating costs increase and trade reduce in the past year.

John Wright, national chairman and North-east regional vice-chairman of the FSB, said: “These startling figures show the credit crunch is trickling through to the small business sector.”

A new study by the Recruitment and Employment Confederation showed “marked declines” in the appointment of permanent and temporary workers last month.

It said total demand for staff fell at the sharpest rate since its survey started 11 years ago.

The Chartered Institute of Personnel and Development reported a 28% increase last month in calls to its legal helpline about laying off staff.

But local recruitment experts recently said cutbacks are not uniform across industry with some sectors still recruiting strongly, including manufacturing, logistics and utilities.