UK employers downbeat on economy, less confident about hiring

20 Dec, 2017 2:48 pm

LONDON (Reuters) – Fewer British employers plan to hire extra staff next year due to one of the gloomiest economic outlooks since Britain voted to leave the European Union in June 2016, a monthly recruitment industry survey showed on Wednesday.

The data from the Recruitment and Employment Confederation (REC) chime with official figures showing a falling number of people in work. In London, employers expected to shed jobs, the REC said.

REC’s survey of employers showed the net balance of companies planning to add permanent staff in the next 12 months fell to +16 percent in the three months to November, down from +24 the same time last year. None thought Britain’s economy was likely to improve in 2018.

“With 2017 coming to an end, it is worrying that so many businesses think mainly of challenges when it comes to next year’s economy,” REC chief executive Kevin Green said.

A Confederation of British Industry survey showed nearly two-thirds of companies think Britain is likely to become less attractive for business as it prepares to leave the EU in March 2019.

Both surveys were conducted before Prime Minister Theresa May secured an agreement from Brussels to move Brexit talks on to a second phase looking at their future trading relations.

Separately, the Chartered Institute of Personnel and Development (CIPD) said there were signs that Britain had already hit peak employment. But there was little evidence that a squeeze on pay would end soon, it added.

“Most employers can’t afford to or don’t feel the need to make an above-inflation pay rise,” Ian Brinkley, acting chief economist at the CIPD, said.

Britain’s economy is expected to grow 1.3 percent next year, slowing from 1.5 percent in 2017, according to the latest Reuters poll of economists.

Concerns about Brexit are having knock-on effects on parts of the housing market, especially in central London, where demand is driven by international investors.

The Royal Institution of Chartered Surveyors predicted that prices would fall in London and southeast England and be flat in Britain as a whole. A Reuters poll on Tuesday showed that economists on average expect prices in London to fall by 0.3 percent next year and a national rise of 1.3 percent.

“A real lack of stock coming onto the market remains one of the biggest challenges, while affordability constraints are increasingly curbing demand in some parts,” RICS economist Tarrant Parsons said. “Given these dynamics, price growth may fade to produce a virtually flat outturn for 2018.”

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