It came as no surprise that the Bank of England has downgraded its forecasts amidst dampened expectation of UK economic recovery. 

The path to revision, down to just 1% growth in 2013, was well laid and news that inflation will stay above target until at least mid 2013 does not surprise either, with the impact of utility bills and poor harvests driving food prices up and combining with a mixed global commodity outlook. Tuition fees have also affected the most recent inflation figures but this will be a one-off rise.

Taken together, with the weakened outlook in the Eurozone, where the stage is not yet set even for any finale – Greece contracted by 7.2% annually in Q3 and further efforts to ensure the bailouts will create greater hardship – plus nervousness surrounding US fiscal cliffs, Chinese growth rates and pending reversals in some of the other companies in Brazil, Russia, India and China are forgiven for remaining cautious.  

However, present data from the US is broadly positive and the looming prospect of a deep recession in the US in Q1 if the fiscal impasse is not solved should focus political minds despite real differences. Some observers expect to see a series of mini deals being struck, addressing each fiscal measure piecemeal, to preclude the triggers being activated by an otherwise legislative vacuum.  

China, with its new leadership, may pose several threats – slowdown in growth, persistent large trade surplus worsened by its artificially low currency, poor relations with US and even the potential for regional territorial conflict but it is really too early to second guess the colours of the new order. When combined all these factors make for further volatility in financial markets.

So there’s clearly plenty for the gloom merchants to trade in, yet some positives do persist, globally especially, but also in the UK. Unemployment figures have again fallen in the UK, now 49,000 below Q2 whilst 513,000 jobs were ‘created’ in the past year, with 100,000 in the past quarter as the private sector strived to plug the gap. The claimant count reversed though, rising over 10,000, perhaps signalling a change of wider unemployment direction in the near future in the likelihood of a GDP headline deterioration in Q4. 

Redundancies did drop in Q3 but vacancies are stubbornly flat, implying persistently low business confidence. The big winner from all this is temporary recruitment with a 4% rise in employees in 2012 already, no doubt Olympics-boosted, but also supported by several recent company results showing relative strength in contract compared with the weaker permanent market.  Much of the same is anticipated until vacancy growth accelerates, business confidence rises and hiring patterns improve. 

Nevertheless, as this week’s publication of the Recruiter HOT 100 proves, compiled by Agile Intelligence, the recruitment industry best performers always find a way to excel with fees growth and investment in headcount leading the way.