Employers' confidence in the U.K. slumped to its lowest level since the fourth quarter of 2012, with salaries of British workers expected to decline in real terms by 0.5% in 2018, results from two separate surveys showed.
ManpowerGroup, a workforce solutions company, said the measure of employers' intentions to increase and decrease the number of employees during the next quarter stood at +4% amid uncertainty about the direction and outcome of Brexit negotiations. Pessimism was more pronounced in London, where the outlook dropped three percentage points to zero percent.
"London's poor performance this quarter reflects a lack of confidence in the capital's future prospects as the reality of the divorce from Europe looms closer," ManpowerGroup UK Managing Director Mark Cahill said. "It will no doubt prompt fears that our high-flying jobs market might be cooling off. The key indicator sectors of Finance and Business Services and the Public Sector have both seen a fall this quarter which could bear out this slowing-down."
The ManpowerGroup employment outlook survey, which is based on responses from 2,102 U.K. employers, is used by the Bank of England and the U.K. government.
Official data showed a decline of 0.4% in inflation-adjusted average weekly earnings in the three months to September from a year ago. Meanwhile, inflation rose to an annual rate of 3.1% in November, a divergence from the Bank of England's 2% target by more than 1 percentage point.
"What stands out is that employers are not increasing their pay rises to account for that," said Benjamin Frost, Korn Ferry global general manager, as reported by Reuters, which covered the human resources firm's survey results.
