Stormy Weather

The UK has been battered by uncomfortable and volatile conditions and fears over damage to property this week - and the weather has been awful as well.

When it rains, it pours, and this is as true for the macroeconomy as anything else.

The UK labour market is beginning to show worrying signs, with a report that nine out of ten employers have no plans to recruit new staff.

Blaming concerns over the state of the economy, recruitment group Manpower said confidence had fallen across most regions and economic sectors. Manpower said the situation was worst in finance and business services firms.

It found that just 9% of all companies questioned said they expected to take on extra staff, while 3% planned to make redundancies.

“Employer hiring confidence continues to weaken with the balance of employers taking on new staff at a pace we have not seen in 15 years,” said Manpower managing director Mark Cahill.

“Concerns about the strength and performance of the UK economy, coupled with recent worries about the stock market and consumer confidence, are having an impact - in particular in the finance and business services sector.”

This is not good news for Alistair Darling, who announces his debut Budget as Chancellor tomorrow. He faces pressure on both government spending and tax revenues, constrained by both the downward fiscal drag effects of economic slowdown and the fiscal rules created by his predecessor (and now Prime Minister) Gordon Brown.

The BBC has a useful page of graphics on what it terms the ‘Chancellor’s Dilemma’ and Evan Davis has his say on the key economic issues facing the present government.