People are gaining confidence the worst of the job cuts are over but the optimism could be premature.

Economic analysts Business Strategies said its survey, carried out between April and June this year, showed fears of the dole queue were receding in most regions of the UK, with people expecting unemployment to fall.

Its employment index showed a reading of plus three, calculated by subtracting those with a pessimistic outlook about employment prospects from those with an optimistic view.

This is an improvement on the two negative numbers recorded in the preceding quarters. But Business Strategies said the hopes could be premature.

Melanie Lansbury, ass-ociate director of its subsidiary Consumer Futures, said: "Big job cuts have been announced in the airlines manufacturing industry and the post and many of these have yet to be implemented.

"We have also seen some sweeping redundancies in the City.

People are clearly pinning their hopes on recovery but it is likely to be next year before that gains pace."

Another survey today said recruitment demand had dropped for the first time since September 11.

Recruitment agency Reed said the lowest demand was in the home counties.

Eighty-two per cent of the 1,305 firms surveyed planned to recruit in the third quarter, compared with 86 per cent in the three months to the end of June. Firms expecting to recruit rose one per cent but the number wanting to recruit to retain staff numbers fell five per cent.

The number of companies expecting to lay staff off remained at nine per cent, compared with ten per cent in the aftermath of September 11.