UK business confidence plunges to new low as Brexit turmoil deepens

Businesses’ confidence in the UK economy has plunged further as employers scale back hiring and investment plans amid growing Brexit-related turmoil, a survey has found.

As MPs prepare for another round of indicative votes in the House of Commons, optimism among British firms has dropped further. It is now 54 percentage points lower than it was in June 2016, when the EU referendum took place.

UK firms have sharply scaled back their hiring and investment plans, a survey of 600 employers from the Recruitment and Employment Confederation found.

“For months, businesses have told us that they were concerned about the general outlook for the economy. It is clear to us that this concern is now closer to home,” REC Chief Executive Neil Carberry said.

“The extension to the Brexit deadline gives us some space to find a pragmatic deal that will give the UK’s businesses the certainty they need to invest and create jobs.”

He added: “But we cannot delay forever. It is in politicians’ power to make the weaker data we see today a blip.” 

The survey was conducted between 11 December and 21 February meaning that optimism could have deteriorated more significantly than the numbers suggest.

While employment in the UK is high by historic standards, economists have raised concerns that productivity growth has remained low.

Despite the weaker outlook, the REC’s survey suggests employers are ready to hire in some areas – especially where there are skills shortages. 

Half (49 per cent) of UK employers expressed concern about the availability of permanent-hire candidates, with a lack of engineers and health and social care workers to causing most concern.

Following this quarter’s decline in anticipated demand for temporary workers, 35 per cent of employers intending to hire temporary workers expressed concern over the sufficient number of agency workers with the necessary skills they require. 

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