LONDON British recruitment firms said the number of people placed in permanent jobs fell at the fastest pace since 2009 in November, highlighting the pressures on the economy at a time of public spending cuts and worries about the euro zone.
A survey for the Recruitment and Employment Confederation (REC) and accountants KPMG showed on Wednesday that private sector job creation slowed to a 25-month low, undermining government hopes that it will pick up the slack from public job losses.
The permanent places index -- a measure of how many extra workers are being hired -- fell to a seasonally adjusted 48.2 in November from 49.7 in October, the sharpest rate of month-on-month decline in the number of workers placed since July 2009.
Readings of 50 indicate no change from the previous month.
The pace of temporary placements also slowed, with the index falling to 50.9 from 52.0. Pay pressures were subdued in November, with wages for permanent and temporary posts only marginally higher.
Britain's coalition government set out plans last month to try to boost growth and employment while sticking to its austerity drive. The cuts are expected to lead to the loss of 710,000 public jobs.
"This month's report makes grim reading," said Bernard Brown, head of business services at KPMG. "Given the uncertainties of the European market, the government's recent stimulus package could not have come sooner, as unemployment creeps ever higher."
Britain's job market has been in decline since May and the slowdown accelerated during the past three months, driven by weaker consumer and business confidence, REC said.
"If confidence doesn't return quickly to get the jobs market moving again, the government may need to take more radical action in the new year," REC Chief Executive Kevin Green said.
Growth of demand for permanent staff eased to a 25-month low in November. The index fell to 52.7 from 53.6 in October.
The survey reinforces the picture of an economy struggling to avoid a double-dip recession after barely growing over the past year.
Given the weak outlook, economists expect the Bank of England to keep interest rates at a record low of 0.5 percent at its policy meeting on Thursday. It is also expected to expand its 275 billion pounds asset purchase programme when the current round ends in February.
(Reporting by Peter Griffiths.)