LONDON (MNI) – The outlook for private sector employment appears
relatively stable, with most large-scale redundancy programmes having
been completed, the Bank of England’s Agents said in a report published

The agents found hiring intentions were marginally stronger in the
professional services and manufacturing sectors, with a few businesses
starting to recruit “selectively” in anticipation of a further uptick in

However, the agents warned the employment outlook in the
construction and public sectors remained downbeat, reflecting the likely
impact of the forthcoming post-election fiscal consolidation.

Despite the lack of a solid pick-up in the employment sector, the
Bank’s agents said pay pressures remained muted. But, they noted reports
of pay freezes had become less widespread and positive (albeit low) pay
awards had risen slightly relative to the previous 12 months.

The agents also noted slight upward pressure on firms’ total labour
costs, reflecting both the restoration of full-time working and
increased pension contributions.

Despite the recent signs of strong retail sales, the BOE’s agents
felt annual retail sales values growth had “softened slightly” and that
spending on consumer services had also flattened off.

Looking ahead, agents found retailers thought that “both announced
and expected tax increases, coupled with the possibility of a further
reduction in employment (particularly in the public sector) would weigh
on consumer spending.”

–London newsroom 0044 20 7862 7492; email:

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