British employers are more pessimistic concerning chances of success for the coming 12 months post the Brexit vote. According to a survey conducted by Adecco, an employment agency, and Chartered Institute of Personnel and Development (CIPD), the percentage of employers who expect to increase the number of employees have decreased to 36 percent fropm the previous 40 percent. About 600 businesses were part of the survey.
The pessimism is also present among economists. Many have publicly voiced their concerns concerning the immediate prospects for the economy of the UK after its EU referendum. Warnings have been issued in this regard. The problem is that such dire predictions may lead to businesses taking conservative moves and thus generating the self-fulfilling prophecy of any economic slump.
The outlook has been found to be grim in other surveys as well. Another survey taken by the accountants Grant Thornton among 170 chief executives found that about 49 percent of the respondents were much less confident when it comes to business matters in the near future. Only eight percent of the respondents felt more confident. About 20 percent of the total surveyed planned to decrease their investment. Approximately 56 percent expressed that they will remain unchanged when it came to making business decisions.
The acting chief economist of the CIPD, Ian Brinkley, said that the evidence of a few employers exercising caution when it comes to hiring is clearly being seen. This behavior is being exhibited only after Britain decided to vote for an EU exit. Even as a number of businesses continue to treat the after Brexit period in their usual manner, and their intention to hire continues to be positive, signs exist that a few organizations in the private sector are preparing to be conservative in the meantime.
Brinkley further added that the UK economy had a positive momentum prior to the referendum and a risk exists that employers may create by themselves the prophecy of a downturn if they over-react to Brexit. Instead of trying to cut, this is the time to invest in processes and in people. Money should be spent on equipment which will increase productivity and also the resilience of the economy and the businesses. These comments were made post the interest cuts by Bank of England to 0.25 percent-a record low- during the beginning of August. This happened for first time in the last seven years. This measure was made to stop a recession in the post Brexit era.