The UK government has been warned by union leaders to abandon their idea of “ideological mantra of cuts” or face a double dip recession.
The warning came as new figures suggested that Britain’s massive service sector was going through a startling loss of jobs.
A study carried out by Chartered Institute of Purchasing and Supply (CPIS) has revealed that businesses’ chiefs from banks and hospitals to hairdressers and cleaning firms were cutting jobs at the fastest rate since October last year, the daily Morning Star said in an exclusive report.
CIPS chief executive David Noble said that “the lowest growth rate in the services sector for a year does seem to reflect what’s been happening elsewhere in the economy.”
Noble conceded that the economy as a whole had increased between April and June at its fastest pace for nine years, but he said, the coalition government’s “austerity measures and the upcoming increase in VAT appear to be weighing down on confidence.”
However, this week’s reports had it that manufacturing orders have hit a nine-month low and house-building has declined which as a result caused the construction industry to grow at its slowest pace for six months. All this contributes to the prospect of a sharp slowdown.
Public services union Unison leader Dave Prentis highlighted the effects of the downturn on the workers and families behind the statistics.
He highlighted that the government’s “ideological choice to cut the deficit hard and fast is causing misery to hundreds of thousands of people.”
A TUS spokesman joined Prentis in urging the government to “heed the economic warning signs and reconsider its plans for swinging cuts.”
According to the forecasts, the UK’s budget deficit was the third largest in the EU last year but will overtake both Greece and Ireland in 2010.
