Businesses confidence slides to a post-referendum low

Paterniano Del Favero
Agosto 23, 2017

Employers' confidence in the United Kingdom economy has dropped into negative territory this month, despite a booming jobs market, according to research.

The agency found that 31% of employers expect the economy to worsen with just 28% expecting it to improve.

Employers are still looking to hire, with one in five (19 per cent) planning to increase permanent headcount in the next three months.

In addition to signs of deteriorating employer confidence, consumers are also becoming more pessimistic.

This lowering of expectations should sound alarm bells, said Kevin Green, chief executive of REC.

"The jobs market continues to do well despite growing uncertainty but this drop in employer confidence should raise a red flag", he said.

The fall in employer confidence in the United Kingdom has coincided with declines in consumer confidence, with GfK's consumer confidence index falling to its lowest level since the Brexit vote in June. "Businesses are continuing to hire to meet demand, but issues like access to labour, Brexit negotiations and political uncertainty are creating nervousness". That means clearly laying out what Brexit plans look like and how employers can keep recruiting the people they need from the EU.

The UK unemployment rate is at its lowest level since records began in 1975, making it more time consuming for businesses to recruit staff as there are fewer qualified people available for those jobs.

'The added factor of dropping consumer confidence is putting some businesses on edge.

Green called for the government to provide clarity on the future shape of Brexit and whether they can hire in European Union workers, adding that companies can only invest if they "feel assured for the future".

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