The number of UK firms planning to make staff redundant has fallen, but the labour market is still in difficulties, according to a report from the Chartered Institute of Personnel and Development (CIPD).

The data reveals that there has been a fall in the number of employers planning to make staff redundant compared with earlier this year but that the jobs outlook in manufacturing and production will ‘deteriorate markedly."

The CIPD also predicted that pay rises will remain modest and working hours will be cut due to the weak demand for labour.

"The patient remains seriously weak and won't recover for several years even if a return to robust economic growth provides the necessary tonic and could easily relapse if the recovery is as fragile and anaemic as many economists fear," said Gerwyn Davies, CIPD public policy adviser.

According to the most recent official figures there are 2.47m people out of work in the country.