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The labour market is slowly starting to recover, with the biggest increase in job vacancies in two-and-a-half years and a rise in permanent placements last month, a survey of recruitment agencies showed today. The Recruitment and Employment Confederation (REC), which runs the monthly survey along with accountants KPMG, said that although the rate of growth in permanent placements slowed in January from December's two-year peak, the rebound remained on track. It added that the recovery was still tentative and could be damaged by higher employment taxes or more regulation.

The Office for National Statistics reported that the unemployment rate eased to 7.8 percent in the three months to November compared to 7.9 percent in the three months to October on the internationally comparable ILO measure. Unemployment has risen less in Britain than in many other countries which exited recession earlier - something economists attribute in part to greater wage flexibility than in previous downturns.

APA