Almost half UK firms plan to cut or freeze hiring: Survey

The UK has shed 700,000 jobs since the start of the coronavirus pandemic. PHOTO: REUTERS

LONDON (BLOOMBERG) - Almost half of firms plan to cut hiring or not recruit at all over the next year, the UK's biggest business lobby group said, adding to the gloom surrounding the country's job market.

While 51 per cent of companies said they plan to expand or maintain recruitment levels, 46 per cent said they would not, according to the Confederation of British Industry's annual survey, which drew responses from 248 firms. The positive balance of 5 per cent was down from +56 per cent last year, the CBI said.

The survey comes three days after official data showed the UK has shed 700,000 jobs since the start of the coronavirus pandemic, with the unemployment rate increasing to 4.1 per cent from 3.9 per cent.

Economists warn that might be the calm before the storm, predicting as many as 3 million people may be out of work by the end of the year, up from 1.4 million currently. That's because the government's furlough program, currently supporting 1 in 10 jobs, is due to end on Oct 31.

"The UK labor market has been under heavy stress since the outset of the Covid-19 crisis and, although the economy has started to re-open, pressure on firms remains acute," CBI chief UK policy director Matthew Fell said in a statement. "With ongoing social distancing, higher costs, lower demand, local lockdowns and fears of a second wave, firms are tempering their recruitment plans."

Other findings of the survey, carried out in conjunction with recruitment company Pertemps, include:

A balance of +7 per cent of firms expect their workforce to be bigger in a year's time, compared to +28 per cent in last year's survey;

Some 48 per cent will examine options to restructure their company;

A third of companies plan to freeze pay across all roles.

Half of companies said, in light of the pandemic, they'd taken steps to protect jobs, including through reducing working hours, cutting bonuses and slashing overtime pay.

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