Demand for UK labour hits lowest level in a decade
Despite pay growth slowing down, the labour market is expected to unwind further with unemployment rising and vacancies decreasing over the year ahead.
December also marked the sixth consecutive month where the index fell, reaching 99.1 points, the accountancy firm noted.
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It added that, despite slowing pay growth, the labour market is expected to unwind further, with unemployment rising and vacancies decreasing over the year ahead.
Economic consultancy Cebr has also forecast the unemployment rate to reach a high of 4.6% in Q2 and Q3 2024, BDO highlighted.
In contrast, the accountancy firm noted its Output and Optimism indices rose in December by 0.9 and 0.1 points, respectively, signalling a modest growth trajectory for UK businesses.
Yet BDO noted optimism is set to decline again in the coming months due to uncertainty surrounding interest rates, alongside weak demand and challenging growth prospects, which all create hurdles for businesses.
However, the firm noted companies began 2024 on a more positive footing than 2023, with its Output and Optimism indices up 2 and 6.5 points, respectively, compared with December 2022.
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Kaley Crossthwaite, partner at BDO, said: «It is encouraging to see our resilient services sector spearheading a small upturn in Optimism and Output during December, as the festive season offered a welcome respite for businesses.
»As companies gear up for 2024, it is critical that businesses see renewed support from the government to enhance their productivity, increase their recruitment and bolster their skills. Only with this
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