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Permanent staff hiring hit by Brexit uncertainty, poll reveals

Uncertainty over Britain’s future within the European Union is causing companies to hold off hiring new permanent staff, a new poll has found

The research, which was carried out by Markit and the Recruitment and Employment Confederation (REC), found that while the number of people in permanent jobs continued to increase throughout March, it did so at its slowest rate in six months. The study also found that there was lower demand for new staff among the 400 recruitment consultancies surveyed, with vacancy numbers at their weakest for 33 months. At the same time, the number of people being taken on in temporary roles or on short-term contracts increased at its fastest rate for four months.

Tom Hadley, the REC’s director of policy, explained that while job growth was expected to continue in the months ahead, doubts around the outcome of the referendum to be held on 23 June were beginning to have an effect on recruitment into permanent job roles. Hadley said the increased hiring of temporary staff was a symptom of Brexit uncertainty, with employers wanting greater flexibility to enable them to respond quickly to ‘threats’ that might arise in the event of a British exit from the EU.

With opinion polls tight ahead of the referendum, the REC’s study echoes other reports revealing that companies are delaying decisions on recruitment and investment until the question of Britain’s EU membership is resolved. Campaigners arguing for Britain to remain within the European Union have argued that a vote to leave could have serious consequences for the UK labour market, with decreased international trade and a reduction in workers’ rights among their top concerns.

Despite Brexit fears, the report highlighted some positive news for the UK jobs market, with salaries for people in permanent positions continuing to rise and the introduction of the national living wage meaning that hourly rates for temporary staff increased at their fastest rate in three months.

Despite record employment figures, however, official statistics show that overall growth in the United Kingdom has been slowing. A separate report by Markit/CIPS showed that growth in Britain’s once dominant services sector came to a virtual standstill last month, with companies holding off major financial decision as they weighed up their options ahead of a potential Brexit.

The report also revealed that the services sector, which includes a number of major restaurant, bar and hotel chains, saw its weakest quarter in three years.

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