Scottish jobs market hits lowest level in 14 months – but still outperforms UK

THE slowdown in Scottish economic growth finally began to catch up with the country’s jobs market last month, according to data released today.

Figures from Bank of Scotland showed the number of people being placed into permanent jobs fell for the first time since September 2010.

The bank’s labour market barometer – which is designed to give a snapshot of the employment market – fell from 51.4 in November to 50.3 in December, its lowest reading in 14 months.

Although any figure above 50 indicates an improvement in the market, last month’s reading shows only marginal growth.

However, Scotland’s jobs market continues to outperform the UK as a whole – it posted a reading of 48.6 in December, showing the overall market had got worse.

Donald MacRae, Bank of Scotland’s chief economist, said: “The labour market is showing the negative effects of the slowdown in the Scottish economy.

“Growth in the number of job vacancies slowed, while the number of people appointed to jobs fell for the first time in 15 months.

“The Scottish economy is struggling to maintain growth momentum in the face of the global slowdown.”

News of stagnation in Scottish employment comes as economists warned that they believe the UK economy is already in recession.

Both the Centre for Economic & Business Research (CEBR) and the accountancy firm Ernst & Young’s Item Club think-tank expect economic output to have contracted in the final quarter of last year and also will in the first quarter of this year. The CEBR forecasts interest rates will now stay on hold until 2016.

Economists blamed the eurozone debt crisis for “paralysing” the UK’s exports, with weekend reports that Greece could default on its debts within the next ten weeks.

But a survey out today from Aviva says that global fund managers are optimistic about the outlook for the eurozone and do not expect any countries to leave the single currency this year. Investment managers now expect full fiscal union within the next decade.

A separate report from one of the professional bodies for chartered financial advisers found that nearly three-quarters of its members think UK government bonds are overvalued. Gilts have become popular during the eurozone crisis because many traders see them as a “safe haven” asset.

In a glimmer of hope for the UK economy, data released by HSBC today shows that 80 per cent of small and medium-sized businesses expect to grow their turnover in the year ahead.