The Chartered Institute of Personnel and Development (CIPD) says the latest Office for National Statistics (ONS) labour market figures, showing a rise in the number of people in work in the three months to the end of August and a fall in unemployment, belie a troubling outlook for employment.

Dr John Philpott, chief economist at the CIPD, says the jobs market is set to cool. He explains: “The recorded rise in total employment masks a clear softening in demand for employees in the quarter ending in August." He added that people of state pension age and above easily accounted for the rise in employment, while the number of unemployed teenagers looking for work rose sharply.

The CIPD’s expects a standstill in overall employment growth by the middle of 2008, with a strong possibility of a fall in the number of people in work.

Philpott says: “There is a strong case for a cut in interest rates as early as next month.”