Firms' confidence in economy falls into negative territory as Brexit worries persist

Employers' confidence in the UK economy has dropped into negative territory this month, despite a booming jobs market, according to research.

A survey by the Recruitment and Employment Confederation (REC) found 31% expect the country's economy to worsen, while just 28% anticipate it will improve.

The net balance has dropped to -3% from +6% in last month's JobsOutlook survey.

It comes despite a robust jobs market - 40% of the 601 employers surveyed said they had no spare capacity in their companies and would need to employ more staff in order to meet demand.

Satisfaction with the quality of candidates who apply is also up, with 73% of employers saying they were happy with the standard between May and July.

But according to REC chief executive Kevin Green, employers are still worried about uncertainty surrounding Brexit and the fall in economic confidence should raise a red flag for the Government.

"Businesses are continuing to hire to meet demand, but issues like access to labour, Brexit negotiations and political uncertainty are creating nervousness," he said.

"The Government must do more to create an environment where businesses have clarity.

"The jobs market is in a good place but employers will only continue to hire and invest if they feel assured about the future."

Campaign group Open Britain, which warns against the damage a 'hard' Brexit could do to the economy, agrees.

Open Britain supporter and Labour MP Mary Creagh said: "It's clear that Brexit is having a chilling impact on hiring in vital sectors like construction, hospitality and engineering.

"The Government's confusion over the detail of our withdrawal from the EU, and their shameful refusal to guarantee the rights of EU citizens living in Britain, are damaging British businesses.

"To protect jobs and our economy, they need to give citizens and businesses certainty that all EU workers living in Britain will have their rights guaranteed, and that Brexit will not be used as an excuse for a self-defeating crackdown on immigration from Europe."