This paper focuses on the demand for and supply of intermediate-level vocational skills within the United Kingdom (UK) economy. Using existing research from surveys and case studies, Part One argues that there is a lack of evidence that widespread intermediate-skill shortages exist within the expanding service sector. In the manufacturing sector, however, skill shortages persist, although there have been large-scale reductions in the number of intermediate-level workers (craft workers). Overall, there appears to be a weakness in the demand for intermediate-level skills across the UK economy, reflecting the large numbers of firms that are pursuing relatively low-skilled, low-quality product market strategies. Part Two examines the stock of intermediate-level skills in the population and by selected industry sectors for the UK and for other European countries. This part notes that while the UK has produced more young individuals with intermediate qualifications, these qualifications are overwhelmingly academic and most of these students proceed to higher education, rather than acquiring vocational qualifications. Evidence from other countries shows that both the fulltime and work-based part-time routes can produce a mix of academic and vocational qualifications. The paper concludes that there is both a weak demand for intermediate-level skills from employers and a weak supply of employees with these skills. It also maintains that policy developments in this area must recognize and deal with these two elements if the UK is going to be able to compete in those markets that require a high proportion of employees to use middle- to high-level vocational skills. (Contains 58 references.) (KC)