The CIPD said the employers hiring intentions index dropped from minus ۱ in the third quarter to minus 3 in the fourth quarter with the vacancies on offer expected to keep falling for the rest of the year as well as in the medium term.

Based on the CIPD report, jobs market confidence in the public sector will even deteriorate in 2012.

This is while, in the next three months the private sector's number of jobs will grow but at a slower pace compared with the previous months.

"The figures point to a slow, painful contraction in the jobs market,” said CIPD public policy adviser Gerwyn Davies.

"Many firms appear to be locked in wait-and-see mode, with some companies scaling back on all employment decisions against a backdrop of increasing uncertainty as a result of the eurozone crisis and wider global economic turmoil,” he added.

Davies also said that the findings mean fewer firms will be seeking redundancies in the private sector though a parallel unwillingness to absorb more people alongside the job cuts in the public sector would lead to an overall rise in unemployment.

"The good news resulting from this lull in business activity is that fewer employers are looking to relocate abroad or make redundancies,” he said.

"The downside is that recruitment intentions are falling, which will make further rises in unemployment therefore seem inevitable given that public sector job losses are outpacing the predictions made by the Office for Budget Responsibility,” he added.

Davies also warned that the market conditions are sending no signals that suggest the Labour market would improve “in the short or medium term.