Hiring of workers in UK remains at 'sky-high' levels

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image captionStatic productivity of UK workers remains a concern for the economy.

Employers in the UK plan to keep hiring more staff, but concerns remain about the country's failure to raise productivity, a new report has warned.

The latest Business Trends Report by BDO gave an employment index reading of 113.0 for March.

That was almost the same as February's figure and well above the 100 level that indicates growth above the long-term trend.

The report indicated that companies were likely to keep creating jobs.

"The hiring intentions of UK firms are at 'sky-high' levels with figures stronger than the heady days of the mid-2000s boom," BDO said.

UK unemployment fell by 102,000 to 1.86m in the three months to January, with the unemployment rate at 5.7%, according to official figures.

The report's optimism index showed that business confidence remained well above the 100 mark.

However, it also highlighted the static level of British workers' output per hour, a situation "unique amongst advanced economies".

Recent Office for National Statistics figures showed that productivity has not increased since 2007, which was unprecedented in the post-war period.

The weakness has perplexed economists and been described by the International Monetary Fund as a major risk to growth.

BDO partner Peter Hemington said the UK's continuing poor labour productivity performance was a significant concern.

"Although employment growth in recent years has been strong, much of this has been in part-time jobs," he said.

"Productivity ultimately determines our prosperity so it is a crucial area that must be addressed. Policy makers of all persuasions must take on this productivity puzzle".

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