Demand for staff shrinks at record pace in December

By Matt Falloon

LONDON (Reuters) - The number of people finding work and demand for staff fell in December at the sharpest rate since at least 1997, while unemployment likely topped two million at the end of last year, according to a survey on Wednesday.

The job market is being hit hard as the economy slides into recession, and the Bank of England is expected to cut interest rates on Thursday for the fourth month running and to an all-time low of 1.5 percent.

On Wednesday, the biggest clothing chain Marks & Spencer announced it would have to shed 1,230 jobs.

The Recruitment and Employment Confederation and KPMG Report on Jobs showed permanent job placements falling for a ninth successive month in December, with its index sliding to 28.6 from 28.9 in November -- the lowest reading in the series.

Any score below 50 suggests contraction.

Temporary job placements fell for a fifth straight month, with a reading of 29.8 in December, down from 31.7 in November and also the lowest since the survey began in October 1997.

"These latest figures only serve to confirm the most pessimistic projections for the UK jobs market," said Mike Stevens, Partner and Head of Business Services at KPMG.

"They are also a lead indicator for a rapidly declining employment situation which is not yet reflected in the government's current employment statistics."