The CBI said financial firms were experiencing a bounce in profits and hiring was up
But the CBI warned that a skills shortages mean it is increasingly hard for firms to find and hire the right people Reuters

Expectations of employment growth over the next financial quarter for UK business and professional services have hit a record high, according to the Confederation of British Industry.

The industry body, which questioned 136 business and professional service employers between July and August, found that confidence for hiring growth in Q4 reached a record high of +46% – the highest rate since November 1998.

The research also revealed that, with 44% of businesses respondents saying that numbers employed were up on three months ago, and 11% saying they were down, employment grew at its fastest pace since November 2007 (+33%) in the three months to August.

"The slowing in the pace of growth and profits in the service sector reflects our view that momentum in the economy will ease in the second half of the year," said Katja Hall, deputy director-general of the CBI.

"But this doesn't necessarily mean a gear change in the recovery. It's encouraging that our service sector firms continue to feel upbeat, especially when looking ahead to the next quarter.

"However, skills shortages mean it is increasingly hard for firms to find and hire the right people.

"It's important that business and government address this issue together, to put the economy of the future on the right footing."

The study also found that optimism about the business situation rose (+31%), as 44% of firms said they were more optimistic than three months ago, whilst 13% said they were less optimistic.

The CBI also said that more than six in ten (63%) of firms expect the rate of business expansion to increase in the year ahead, and 36% do not, giving a balance of +27% – the lowest since May 2013 (+14%), but well above the average of +3%.

The industry body als explained that the availability of professional staff is cited as a factor likely to limit expansion in the year ahead by 45% of firms, the most since May 2008.