REC survey raises 'red flag' on UK economic outlook

The results of one of the most widely-followed surveys of employer confidence raised a "red flag" on the economy, leading the business lobby that compiled it to urge Wesminster for clarity on its Brexit plans and how it plans to ensure continued access to EU workers.

Not only was employer confidence in the UK economy on the wane, the fall appeared to mirror a recent fall in consumer spirits.

According to the Recruitment & Employment Confederation's latest JObsOutlook survey, 31% of employers expected the economy to worsen, with only 28% expecting an improvement, for a balance of -3%.

That was down from a balance of +6% seen in July - just one month ago.

In June, GfK's UK consumer confidence index plumbed its lowest reading since the Brexit vote.

Meanwhile, confidence in making hiring and investment decisions remained positive, with 19% of employers planning to increase permanent headcount in the next three months, REC said.

Furthermore, the balance of firms saying they would still make hiring and investment decisions remained "positive" at 10%, the survey showed - but was at its lowest level of the past 12 months.

Nonetheless, REC chief Keving Green said issues like Brexit negotiations and political uncertainty were feeding nervousness, with employers in construction especially concerned given their reliance on EU workers.

For Green, "this drop in employer confidence should raise a red flag."

"The added factor of dropping consumer confidence is putting some businesses on edge. If people reduce their spending, businesses will be impacted," he said.

"The government must do more to create an environment where businesses have clarity. That means clearly laying out what Brexit plans look like and how employers can keep recruiting the people they need from the EU. The jobs market is in a good place but employers will only continue to hire and invest if they feel assured about the future."