UK firms still hiring despite Brexit hit to business confidence

One in four UK employers are planning to take on more permanent staff over the next 12 months despite a sharp fall in business confidence following the vote to leave the European Union, according to a new survey.

The Recruitment and Employment Confederation (REC) said 34% of employers were pessimistic over economic conditions in August, compared to 22% in July and 13% in June.

Despite this, 25% of employers plan to take on more permanent staff over the next four to 12 months.

REC chief executive Kevin Green said the fundamentals of the jobs market were "very strong" amid the uncertainty created by the Brexit vote.

However, he added that skill shortages were widespread in many sectors and warned that they could get worse if the supply of skilled EU workers was impeded.

Official data released earlier this month by the Office for National Statistics revealed that the UK employment rate stayed at a record high 74.5% between May and July.

The number of people employed reached a record high of 37.77 million, while the number of unemployed fell to 1.63 million.

'Anxiety over future'

The survey of 602 employers showed that 22% of firms planned to take on more permanent staff over the next three months, while only 4% expect to reduce their workforce.

However, skill shortages were reported in the engineering, construction and health and social care sectors.

"Thanks to a resilient business-as-usual attitude from consumers since the referendum, demand on businesses has remained buoyant and this is reflected in employers saying they will actively expand their workforces in the coming months," Green said.

"This is good news, but there are question marks around the sustainability of positive trends we have seen since the referendum.

"Skills shortages are a major problem in many sectors, one that will only get worse if the supply of skilled EU workers is in any way curtailed.

"Employer confidence has fallen significantly, suggesting that while businesses continue to perform well, there is much anxiety about what the future holds."