Workers pay price for Brexit chaos as firms axe thousands of staff

The study shows t thousands of workers are now paying the price for the chaotic Brexit negotiations
Bloomberg via Getty Images

Businesses are laying off staff at the fastest rate since September 2012 as “Brexit indecision” takes a heavy toll on employers’ confidence, a major survey revealed today.

The “disappointing” findings from the IHS Markit/CIPS monthly study suggest that thousands of workers are now paying the price for the chaotic negotiations over Britain’s departure from the European Union.

In the dominant services sector, which accounts for 80 per cent of Britain’s GDP, the decline in employment in February was the fastest for more than eight years.

The level of new work also fell, while business optimism is at its lowest level since the immediate aftermath of the EU Referendum in July 2016.

The survey found that the overall level of business activity picked up slightly in February but is still weak and points to the UK economy remaining “close to stagnation”, with projected growth of just 0.1 per cent in the first quarter of the year.

Company purchasing managers surveyed said: “Brexit-related uncertainty remained by far the most prominent factor acting on business activity growth. There are reports that political uncertainty encouraged delays to corporate spending decisions and a general rise in risk aversion among clients.”

Chris Williamson, chief business economist at IHS Markit, warned: ”Worse maybe to come when pre-Brexit preparatory activities move into reverse. Global economic growth remains sluggish, adding an increasingly gloomy backdrop to the UK’s current problems.”

Duncan Brook, group director at the Chartered Institute of Procurement and Supply, said: “Once again this month the lifeblood of the sector continued to leak away with Brexit indecision striking another blow to new orders and employment.”

Shadow chancellor John McDonnell added: “This is a signal of plummeting business optimism in the wake of the Government’s bungling of Brexit.

“The signs of falling UK private sector employment are worrying, against the backdrop of dropping business investment, downgraded growth forecasts, and a manufacturing recession.”

The survey came as the British Retail Consortium said sales growth on the high street slowed to just 0.5 per cent in February.

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