Fewer employers are looking to recruit and more are considering making redundancies as the economy continues to slow, a new report shows.

According to the latest labour market outlook survey by the Chartered Institute of Personnel and Development (CIPD), just 29 per cent of employers plan to recruit more staff during the third quarter of this year.

This compares with the second quarter, when 37 per cent were looking to expand their workforce by taking on new employees.

Meanwhile, 27 per cent of employers said they are planning to make some staff redundant between July and September, up from 22 per cent between April and June.

John Philpott, chief economist at the CIPD, said: "The jobs market has been one of the few bright spots in the UK economy, but cracks are appearing in the face of an increasingly uncertain economic outlook."

Rob Coates, the managing director of human resources consultancy Willerby Hill, has warned employers that redundancies are not the answer to financial problems during the credit crunch.

Instead businesses should focus on boosting the productivity of their workforce, he insisted.