Although the Confederation of British Industry played down recession threats on Monday, a study by the Chartered Institute of Personnel and Development (CIPD) paints a dismal picture of the job scene.
A CIPD quarterly survey - the Labour Market Outlook - of more than 1,000 employers conducted by YouGov, indicated job prospects were set to worsen in the coming months as firms make workers redundant. It also pointed to a further widening of a north-south jobs market divide. Apparently, employment prospects in the north of England have fallen but have improved modestly in the south of England.
The alarming statistic is that unemployment figures could reach 2.85 million by the end of the year unless business conditions improve.
The study showed the difference between the number of employers intending to hire new staff and those warning of cuts had fallen to the lowest since the end of the last recession in 2009. Almost a third of private sector service firms admitted they planned on making redundancies - an increase from one in four last year.
According to the report, worsening job prospects are due to a drop in confidence in the private sector. It is predicted that employment growth in manufacturing will stall and fewer jobs will be created in the service sector.
"Whereas employers were in wait-and-see mode three months ago, more private sector firms, particularly among private sector services firms, have decided to push the redundancy button in response to worsening economic news," Gerwyn Davies, public policy adviser at the CIPD was quoted as saying in The Guardian.
"This will exert yet more pressure on a jobs market that is buckling under the strains of contractions in economic growth and public sector employment." he added.
It was found that six of ten employers said they were not planning to create any new roles in the next three months. Where employers do expect to hire new staff, they will be taken on at a management or executive level or in sales and marketing departments.