Firms are set to unleash a fresh wave of job cuts and pay freezes in a huge blow to the faltering economy.
A report from the Chartered Institute of Personnel and Development warned one in four employers planned to make redundancies in the first three months of this year.
Cipd chief economist John Philpott said: "The jobs market needs the continued support and protection it is getting from the Government." Alan Downey, head of public sector at KPMG, which helped with the research, added: "Many public sector bodies are drawing up plans to reduce costs."