February 27, 2019
LONDON (Reuters) – British employers’ confidence in the economy has fallen sharply ahead of Brexit, hammering hiring and investment intentions, an industry survey showed on Wednesday.
The Recruitment and Employment Confederation’s (REC) gauge of confidence in the economy slid to -20 in the three months to January, the lowest reading since the survey started in mid-2016 and down from -14 in the previous report.
The survey adds to a raft of business surveys showing that businesses have put the brakes on investment plans ahead of Britain’s scheduled departure from the European Union on March 29.
Lawmakers in London have yet to approve a deal that would smooth Britain’s divorce with the EU, leaving open the prospect of a disorderly departure – although on Tuesday Prime Minister Theresa May offered lawmakers the chance to vote next month in favor of a delay.
“With employers’ confidence levels at a low point and hiring intentions for both permanent and temporary staff dropping in today’s survey, there can no longer be any argument: uncertainty is damaging for job creation,” REC chief executive Neil Carberry said.
By contrast, consumer confidence has held up relatively well, although a separate survey showed households are being hit with higher prices in shops.
The British Retail Consortium said shop prices rose at an annual pace of 0.7 percent in February, the highest inflation rate since March 2013 and following a 0.4 percent increase in January.
“While price rises over the last six months have been relatively modest, a no deal Brexit would have a much more immediate and dramatic effect,” BRC chief executive Helen Dickinson said.
A Citi/YouGov survey earlier this week showed expectations for consumer price inflation among Britain’s public hit a joint five-year high in February.
Although consumer price inflation hit two-year low in January, the Bank of England has said this mainly reflects a fall in the price of oil and that domestic price pressures are strengthening.
The REC jobs outlook surveyed 611 companies between Nov. 1 and Jan. 25.
(Reporting by Andy Bruce, editing by David Milliken)