Businesses in the UK are “giving up hiring new staff” amid uncertainty over Brexit, a leading business group has warned.
Business confidence is weakening and the UK economy is “stuck in a rut” because of the way the UK's divorce from the EU is panning out, the British Chambers of Commerce (BCC) said.
A survey of 5,600 businesses showed manufacturing exports were slowing and many services firms were giving up trying to hire new staff members, the group added
It also found recruitment problems reported by service firms have spiked and said an increasing number of manufacturers expect prices to rise, mainly due to the cost of raw materials.
Uncertainty over future trading conditions after Britain leaves the EU is continuing to act as a brake on business investment in both the manufacturing and services sectors, the report said.
The balance of firms that looked to invest in either plant and machinery or training in recent months fell in both sectors to their lowest level in more than a year.
Dr Adam Marshall, director general of the BCC, said: “These figures reinforce what we are hearing from businesses up and down the country - the uncertainty over Brexit and the lack of bold moves to boost business at home are starting to bite.
"It should be a matter of grave concern to the government that sales and orders both at home and abroad are stagnating.
"Weaker sterling is no longer proving a boon to many of our exporters, while consumer spending is failing to boost the domestic market."
Last month, new research from the BCC showed that one in five British businesses will cut back on investment if there’s no deal and a similar amount will move all or part of their business to the EU.
It said others will resort to cutting back on staff recruitment, with larger firms and those trading overseas most likely to feel the impact of no deal.
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Mr Marshall added: "We have a vibrant and innovative business community that wants to invest and grow but we are stuck in limbo while Brexit negotiations rumble on.
"The upcoming Budget must deliver radical, decisive action to boost growth and productivity at precisely the moment that the economy needs it most.
"There has never been a more important time for the government to bolster business investment, competitiveness and productivity in the face of significant Brexit headwinds.
"While fewer companies are trying to recruit, those that are hiring they are finding it increasingly challenging to fill vacancies.
"The sharp deterioration of the share of firms attempting to recruit is a concern and reflects both persistent hiring difficulties and heightened economic uncertainty, which if sustained could materially weaken jobs growth."
Additional reporting by Press Association.
