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The UK jobs market is 'holding up', but could soon be at the mercy of economic events, according to research from the Confederation of British Industry.

Some 47 per cent of employers are predicting their workforces will be larger in a year and 19 per cent predict they will be smaller, giving a balance of +28 per cent.

The figure rises to +35 per cent in firms with fewer than 250 employees, according to the study of 462 companies.

Only 7 per cent of firms are operating a recruitment freeze, compared with 61 per cent during the depths of the recession in 2009.

CBI deputy director-general Dr Neil Bentley says that it is encouraging that firms right across the UK are growing their workforces, especially smaller companies.

'But employers are making hiring plans on shifting sands and there is a risk the tentative private sector jobs recovery could be blown off course by fast-moving economic events at home and abroad,' he adds.

Prospects for graduates are starting to improve, with a balance of +11 per cent of firms planning to take on more university leavers in the next six months.

On pay, 67 per cent of respondents are not planning to match or exceed inflation at the next pay review.

Where pay rises are planned nearly half (49 per cent) of employers are opting for a general increase below the rate of inflation or targeted awards for some members of staff.

Albert Ellis, CEO of  recruitment consultancy Harvey Nash says, ‘The UK jobs market is holding up, with robust demand for highly-skilled staff in professional services, science and IT, but there is a question mark about whether private sector recruitment can keep pace with public sector job losses.

‘With the risk that economic conditions may well become more challenging, companies are understandably taking a cautious approach to pay for next year, particularly in small and medium-sized firms.’

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