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Brexit hit recruitment in July a new survey shows Brexit hit recruitment in July a new survey shows
(35 minutes later)
New survey data showed the number of people in the UK securing a permanent job has decreased for the second month in a row.New survey data showed the number of people in the UK securing a permanent job has decreased for the second month in a row.
The Report on Jobs, produced monthly by IHS Markit, collects data from 400 UK recruitment and employment firms.The Report on Jobs, produced monthly by IHS Markit, collects data from 400 UK recruitment and employment firms.
Its data showed that in July permanent placements fell at the sharpest rate since May 2009.Its data showed that in July permanent placements fell at the sharpest rate since May 2009.
It also suggested that companies paid more to temporary staff, however that growth was the slowest in ten months. The results also indicated that some clients of recruitment firms had shifted towards using short-term staff.
Participants in the survey said uncertainty caused by Brexit had caused the shifts.Participants in the survey said uncertainty caused by Brexit had caused the shifts.
"The UK jobs market suffered a dramatic freefall in July, with permanent hiring dropping to levels not seen since the recession of 2009," said Kevin Green, the chief executive of the Recruitment and Employment Confederation (REC), which sponsors the survey."The UK jobs market suffered a dramatic freefall in July, with permanent hiring dropping to levels not seen since the recession of 2009," said Kevin Green, the chief executive of the Recruitment and Employment Confederation (REC), which sponsors the survey.
However, Mr Green said it was important not to jump to conclusions from one month's data.However, Mr Green said it was important not to jump to conclusions from one month's data.
"The truth is we don't know what long term consequences the referendum result will have on UK jobs. With the political situation becoming more stable and the Bank of England making sensible decisions, we may well see confidence return to the jobs market more quickly than anticipated," he said."The truth is we don't know what long term consequences the referendum result will have on UK jobs. With the political situation becoming more stable and the Bank of England making sensible decisions, we may well see confidence return to the jobs market more quickly than anticipated," he said.
'Highly cautious''Highly cautious'
Of the recruitment consultants polled, nearly 38% said they had placed fewer people in permanent positions in July, an increase from 32% in June.Of the recruitment consultants polled, nearly 38% said they had placed fewer people in permanent positions in July, an increase from 32% in June.
Despite this, the survey found that demand for employees was high in many sectors and starting salaries for both permanent and temporary staff increased in July.Despite this, the survey found that demand for employees was high in many sectors and starting salaries for both permanent and temporary staff increased in July.
Nursing and medical care was the most in-demand category for permanent staff during July. Construction workers saw a decline in demand for their services, albeit modest overall.Nursing and medical care was the most in-demand category for permanent staff during July. Construction workers saw a decline in demand for their services, albeit modest overall.
"Demand for staff remains strong with vacancies continuing to rise, but the sharp fall in placements suggests that businesses are highly cautious about committing to new hires," said Mr Green."Demand for staff remains strong with vacancies continuing to rise, but the sharp fall in placements suggests that businesses are highly cautious about committing to new hires," said Mr Green.
"Economic turbulence following the vote to leave the EU is undoubtedly the root cause.""Economic turbulence following the vote to leave the EU is undoubtedly the root cause."
With regard to salaries, although increases for both permanent and temporary staff were reported, the rate of growth for the former eased to a 38-month low. Temporary and contract staff pay meanwhile rose at the slowest rate since February.
The survey comes a day after Governor of the Bank of England, Mark Carney, said unemployment in the UK was expected to rise to 5.5% over the next two years. It is currently 4.9%.The survey comes a day after Governor of the Bank of England, Mark Carney, said unemployment in the UK was expected to rise to 5.5% over the next two years. It is currently 4.9%.