Demand for labour up in UK, down in Oz

The biggest surge in the jobs market is coming in foreign exchange and interest rate swaps on worries over Spain's struggling banking system. Photo / Martin Sykes

Worried businesses rushing to protect themselves against the potential collapse of the euro helped trigger a surprise rush to hire in London's Square Mile last month, figures showed yesterday.

The City jobs market had its best month since August last year as it created 4320 posts in May - a 25 per cent rise on the previous month, says financial services recruiter Astbury Marsden.

The biggest surge in the jobs market is coming in foreign exchange and interest rate swaps on worries over Spain's struggling banking system as well as the potential impact of a sudden pull-out of the single currency by Greece. Most of London's biggest investment banks, including Barclays Capital and Royal Bank of Scotland, are thought to be adding staff.

The upturn comes as the single currency drops to its lowest level against the United States dollar for almost two years.

Mark Cameron, Astbury Marsden's chief operating officer, said: "Volumes within these areas seem to have picked up over the year. The threat to the euro is now seen as a risk that businesses need to consider hedging against. That has created a lot of activity. With institutional investors bearish about the euro, currency sales teams have certainly been earning their keep."

But Cameron warned he was "not ready to break open the champagne" despite the unexpected recruitment burst. The number of jobs created last month was still far lower than the same month a year ago. According to the Centre for Economics and Business Research, there are 100,000 fewer workers in the City than in 2007.

He added: "This positive trend in banking recruitment could well continue into June. Beyond that, it would be foolhardy to predict which way the City jobs market could go because Europe's future is so uncertain."

His comments came as Panicos Demetriades, head of Cyprus' central bank, warned Cyprus may have to call on European aid to prop up its second-largest bank.

- Russell Lynch, Independent

SLOW DOWN IN LABOUR DEMAND

Job advertisements in Australia have fallen for a second consecutive month as demand for labour falls even in the mining boom states, a private survey shows.

Total job advertisements on the internet and in major metropolitan newspapers fell 2.4 per cent in May, following a 0.8 per cent drop in April, the ANZ job advertisements survey showed on Monday. In the year to May, job ads were down 4.3 per cent.

ANZ head of Australian economics and property research Ivan Colhoun said the most interesting development was that newspaper job ads in Western Australia fell for the fifth consecutive month.

"Job advertising trends are sending a signal of a softening in labour demand in Australia," Mr Colhoun said.

The Australian Bureau of Statistics will release May employment data on Thursday and the ANZ is forecasting that will show 5000 jobs were lost in the month and the unemployment rate will rise to 5.1 per cent from 4.9 per cent in April.

- AAP