FILE PHOTO - EU and Union flags fly above Parliament Square during a Unite for Europe march, in central London
LONDON (Reuters) - British workers are becoming more reticent about moving jobs as the process of leaving the European Union gets underway, exacerbating long-standing skill shortages, a survey of recruiters showed on Friday.
Availability of temporary staff declined in March at the fastest rate since January 2016 and fell sharply for permanent staff too, the Recruitment and Employment Confederation (REC) said.
The REC survey, which dates back 20 years, is used by Bank of England policymakers as a gauge of the labour market.
Britain's economic prospects are tied closely to how businesses react to the country's Brexit negotiations over the next two years. Hiring and wage decisions will be key to the outlook for consumer spending, the main driver of growth.
"Economic uncertainty about future prospects is having a detrimental effect on employees' willingness to risk a career move at this time, which seems to be driving down candidate availability," REC chief executive Kevin Green said.
This chimed with other signs of unease among consumers, who are increasingly worried about their personal finances and the outlook for the economy, surveys have shown.
Retail sales have slowed this year in the face of rising inflation, caused by rising energy prices and the pound's post-Brexit vote drop.
Staff shortages continued to push up growth in starting salaries although more slowly than in February, REC said. Information technology and medical staff were among the most in-demand.
BoE policymaker Gertjan Vlieghe on Wednesday said slow wage growth in official data suggested the economy can continue to grow without pushing up inflation, despite the unemployment rate's fall to its lowest level since 2005.
The BoE is widely expected to keep interest rates at their record low throughout this year and possibly until 2019 as it steers the British economy through the uncertainty linked to the exit from the EU.
However, one rate-setter - Kristin Forbes - voted last month for a rate hike and others said they might follow suit soon if there were signs of inflation picking up by more than expected or that economy was maintaining its momentum of 2016.
(Reporting by Andy Bruce; Editing by William Schomberg)