Brexit vote prompts hiring freeze and unemployment fears

 
Jake Cordell
Follow Jake
Economists expect unemployment to rise following the UK's vote to leave the EU
Economists expect unemployment to rise following the UK's vote to leave the EU (Source: Getty)

Hiring has crashed in the weeks after the referendum according to two separate studies of employers, raising fears unemployment could be set to rise over the summer.

The closely-watched jobs report from the recruitment and employment confederation recorded the first fall in permanent hiring for four years in June as firms refused to take on staff ahead of the vote.

In London, permanent staff numbers dropped for the first since December 2012. Businesses continued to take on temporary employees, though the rate of growth also eased back to its lowest level since last autumn.

“Uncertainty during the run-up to referendum saw many employers suspend permanent hiring,” said REC chief executive Kevin Green.

A separate study from CEB, which compiles job listings on websites from across the UK found the number of advertised openings plummeted by 44 per cent in the week after the referendum.

The consultancy said there were 817,000 active openings last week compared to nearly 1.5m both the week before and in the same week last year.

In yet more gloom, Barclays also joined the list of those predicting a rise in unemployment now the UK is preparing to untangle itself from the European Union. The bank expects unemployment to rise from five to 6.1 per cent over the next 18 months, citing “greatly heightened economic and business risks” in an extremely downbeat set of economic forecasts.

The REC also found wage growth was slowing, running at its most sluggish pace in 33 months during June. This comes at a time when inflation is predicted to spike, heaping pressure back onto disposable incomes little over a year after real wage growth cemented itself in positive territory.

One-third of consumers told GfK they were expecting prices in shops to rise rapidly over the next year - up from just 13 per cent who were bracing for more expensive bills before the vote.

Related articles