Job prospects in Britain have fallen to their lowest level for almost a decade as the credit crunch forces employers to cut costs and freeze recruitment.

A new survey of more than 55,000 businesses claims that companies' intentions to hire during the final quarter of this year are the weakest since the beginning of 1999.

The findings, from a poll conducted by Manpower, the recruitment company, will alarm economists and trigger fresh fears of widespread redundancies in the run up to Christmas.

Official figures last month showed that the number of people out of work and claiming benefits rose in July by the largest amount since 1992.

Manpower said that employees in the hotel and retail, construction and finance and business services sectors were most exposed to the tougher economic climate. Prospects in hotel and retail are the worst since 1995.

Mark Cahill, managing director at Manpower UK, said: “Employers have faced difficult times since the credit crunch and wider economic and confidence worries really took effect last year.

“This uncertainty is being reflected by new recruitment plans being put on hold and with slightly more employers now looking to reduce their staff numbers than add to them.

DSG International conceded last week that it was likely to hire fewer temporary staff as it nears the Christmas shopping season to save money while Marks & Spencer recently cut its redundancy terms in a move that triggered fears of an imminent job- cutting programme.

The Nationwide Building Society yesterday conceded that it was likely to cut jobs at the Derbyshire and Cheshire Building Societies when it completes the acquisition of both groups later this year.

Manpower claimed that employers in 25 of 33 countries were slowing down their recruitment.

While some economies, such as France and Germany, were “holding their own”, other markets such as Britain, the US and Spain were “clearly struggling to gain traction”.

Employers in the US are expected to hire at the slowest pace in five years, with hiring expectations in wholesale and retail at a 17-year low.

Jeffrey Joerres, chairman and chief executive at Manpower, said: “While the fourth quarter is a traditionally slower period in many markets as employers budget for the upcoming year, hiring in the retail sector is typically stronger due to the holiday season.

“This weaker employer confidence is particularly alarming, as it could indicate a less than Merry Christmas for job seekers.”

Explore Economics

• Pre-Budget Report 2008

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts