U.K. Services Firms Are Doing the Least Recruiting in 25 Years
(Bloomberg) -- Services firms in the U.K. are giving up on attempts to hire new staff as business confidence plummets ahead of the nation’s impending exit from the European Union, the British Chambers of Commerce said in its quarterly economic survey.
The percentage of service firms attempting to recruit is at its lowest level in quarter of a century, and even those trying to hire new workers are finding it difficult to do so, the BCC said on Friday. Export sales and orders are also at their lowest levels since the second quarter of 2016, an indication that the U.K. is poised to record its slowest annual economic growth since the financial crisis, according to the BCC.
The findings underscore the nervousness in the world’s sixth largest economy, even as Prime Minister Theresa May scrambles to strike a deal with the EU ahead of a November deadline. With just weeks to go before a potential divorce deal is finalized, there’s still no clarity on future trading conditions.
“The uncertainty over Brexit, and the lack of bold moves to boost business at home, are starting to bite,” said Adam Marshall, director general of the BCC. “There has never been a more important time for the government to bolster business investment, competitiveness and productivity, in the face of significant Brexit headwinds.”
The BCC’s survey of 5,600 businesses also showed uncertainty about future trading conditions has hampered investment in both manufacturing and services sectors, with the ratio of companies looking to spend on factories, machinery or training falling to their lowest level in more than a year.
The percentage of firms citing raw materials as the source of cost pressure, as well as the number of companies confident of revenue and profit rising in the next 12 months, also fell, the BCC said.
The U.K. budget -- due to be presented on Oct. 29 by Chancellor of the Exchequer Philip Hammond -- must deliver “radical, decisive action to boost growth and productivity,” Marshall said. The government should work with business to develop a policy on immigrant workers, while dropping “arbitrary migration caps and targets,” he said.
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