IT contractors will be pleased to hear that the UK employment is seeing a returning "mood of optimism", according to the Recruitment and Employment Confederation (REC).

In its June edition of the Jobs Outlook report, the REC claims that, of the members it polled, one in three is expecting to grow its long-term temporary workforce in the next year.

There has also been an increase in demand for short-term temporary workers, thanks to UK firms adopting a flexible approach to working and resourcing as economic uncertainty continues.

REC director research Roger Tweedy said there are now increasing signs of an upturn in employers' hiring intentions - albeit a gradual one.

However, he did warn: "These positive signs will be offset to some extent by what is happening in the public sector.

"Unemployment is likely to increase over the next 12 months as significant cuts in public expenditure are implemented."

The REC report contrasts with one produced by recruitment agent Manpower earlier this month, which said few companies expect to take on extra staff this year.