Confidence continues to rise among candidates despite today’s rise in unemployment, according to Charles Logan, director at Hays.

The figures from the Office for National Statistics (ONS) show unemployment in the UK rose by 35,000 to 2.5m in the quarter to October, while the unemployment rate rose to 7.9%, rising from 7.7% in the three months to September.

Logan told Recruiter: “We are seeing confidence from jobseekers and employers continuing to increase, albeit slowly, and skill shortages starting to emerge. There remains a high demand for senior specialist workers, for example in IT, financial services and senior finance.

“We are also seeing an increase in the number of professionals with 2-3 years’ experience now looking to move jobs, which is creating natural attrition. While employers are now more likely to replace candidates, we aren’t yet in a position where SMEs are creating new jobs.

“While we are expecting activity to pick up again after the Christmas break, the full impact of the Localism Bill, with projected job losses ranging from 70,000 to 140,000, is yet to be realised in the public sector.”

Roger Tweedy, the REC’s director of research, says: “With the public sector squeeze still to be fully felt, the jobs market remains fragile. However, confidence is slowly increasing among private sector employers, which bodes well for 2011. The feedback from recruiters in many sectors is that the main challenge is going to be a lack of suitably skilled candidates for some of the specific opportunities that are starting to open up.

“Current jobs market dynamics have confirmed shortages in areas such as IT and engineering. The mismatch between available skills and employer demand could provide a hindrance to a private sector-led economic revival. As well as looking at ways of boosting job creation, we need to ensure that we are building an effective pipeline of suitably skilled workers.”

Dr John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development (CIPD), says: “The latest jobs market figures are much worse than expected and the opposite of what was wanted in the run-up to Christmas, with no joy and very little comfort on offer. It is especially disappointing to see the positive momentum that had built up earlier in 2010 appear to run out of steam even before the full impact of the coalition government’s spending cuts and tax hikes take effect. This does not bode well for 2011.”

David Kern, chief economist at the British Chambers of Commerce (BCC), adds: “These figures are disappointing and slightly worse than expected. For the first time in six months, unemployment is up and employment is down. The number of people working full time has fallen, while the number of those working part time because they could not find a full-time job rose to a new record high.

“On the basis of these figures, we reiterate our forecast that UK unemployment will likely rise to 2.6m over the next 12-18 months, a further net increase of around 100,000. In view of the growing pressures on the economy as the deficit-cutting programme is implemented more forcefully, and given the expected fall in public sector employment, it is critical that businesses are able to create new jobs.

“We have seen some positive developments this year, but these trends must be encouraged. In particular, the labour market needs to remain as flexible as possible. Onerous regulation must be scrapped or suspended so that the private sector can absorb the temporary job losses created by the fiscal austerity plan.”