The current economic crisis has led to businesses losing confidence for the future which in turn has produced low recruitment levels, an institute says.
Unless the Bank of England cuts interest rates and taxes the situation will not improve, according to the Chartered Institute of Personnel and Development (CIPD).
Research by the organisation shows half of bosses believe their company’s financial performance will stay the same in the next three months.
Gerwin Davies, public policy adviser at the CIPD, said the current financial situation may be improved if interest rates and taxes are cut.
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"Business confidence at the moment is extremely low and it is making businesses nervous and cautious about the future," he added.
The research also showed 83 per cent of companies believe the economic conditions of the country will get worse over the next three months.
According to the Office for National Statistics, there were 40,000 less jobs available between the three months to October in 2007 and the same period in 2008.
