Workforce hit by Brexit ‘hangover’

Staff hiring on hold as economy shrinks

it FIRMS have slashed their hiring plans to a seven-year low – just as the economy has gone into reverse.

Brexit was blamed for a double whammy. The first blow came yesterday as the Office for National Statistics said the economy shrank by a worse than predicted 0.4% in April.

The drop was partly driven by car plants shutting in April for fear of supply problems after the original Brexit date of March 29.

Other firms stockpiled products earlier in the year in an initial boost to manufacturers, which eased by April. A new Brexit deadline has been set for October 31.

Car production fell 24% in April, the biggest drop since records began in 1995, with the broader category of “transport equipment” suffering its largest drop since 1974.

Yael Selfin, chief economist at KPMG UK, said: “The hangover that’s followed the UK’s original exit date is proving stronger than anticipated.”

Gross domestic product – the value of everything the UK churns out – grew by just 0.3% in the three months to April.

Meanwhile, a report out today from recruitment giant Manpower found firms are holding off taking on new staff because of Brexit. Although 3% more planned to hire than fire staff over the next three months, it was the weakest for seven years.

Mark Cahill, ManpowerGroup UK managing director, said: “Private sector companies are exercising more caution as they wait and see what happens with Brexit after the summer.”

The public sector is twice as likely to be looking to hire workers, Manpower’s survey found. That’s largely because years of austerity, wage squeezes and EU workers leaving has left the public sector struggling to fill vacancies. TUC General Secretary Frances O’Grady said: “Industry is paying the price for the government’s Brexit chaos.”

The Prime Minister’s official spokesman said: “The fundamentals of our economy are strong and it has grown every year since 2010.”