There have been sharp declines in permanent and temporary billings across most sectors of the job market, according to the Recruitment and Employment Confederation/KPMG Report on Jobs for January.

Nursing, medical and care remained the only sector to avoid a reduction in vacancies, but there was further strong improvement in the availability in candidates.

Kevin Green, chief executive of the REC, told Recruiter: “These figures continue to cause real concern and confirm that the labour market is continuing to contract, although the decline in permanent placements is less marked than in the previous month.

“The government needs to breathe life into the jobs market, for example by harnessing the contribution of temporary work as a valuable mechanism for keeping people in employment.”

Unemployment rose by 131,000 to 1.92m in the three months to November, the highest since 1997.