UK labor market in ‘freefall’ after Brexit: Survey

The UK labor market went into a “freefall” last month after the vote to leave the European Union, with the number of permanent jobs falling at the fastest pace since May 2009, according to a new survey.

The monthly report from the Recruitment and Employment Confederation (REC) suggested that business confidence and activity slowed sharply after the June 23 referendum to leave the EU.

The survey also found that starting salaries for permanent jobs rose in July at the slowest pace in more than three years.

“The UK jobs market suffered a dramatic freefall in July, with permanent hiring dropping to levels not seen since the recession of 2009,” said REC chief executive Kevin Green.

“Economic turbulence following the vote to leave the EU is undoubtedly the root cause,” he added.

The report shows companies were focusing more on hiring short-term staff because of the uncertainty.

“The truth is we don’t know what long-term consequences the referendum result will have on UK jobs,” Green said.

On Thursday, the Bank of England cut interest rates to near zero and released billions of pounds of stimulus to cushion the economic shock from the Brexit referendum.

On June 23, some 52 percent (17.4 million) of British people voted to leave the EU after 43 years of membership, while roughly 48 percent (16.14 million) of people voted to stay in the union.

The vote result caused political turmoil in the country, where David Cameron announced his resignation as prime minister and Theresa May was named as the new premier within a few weeks.

The vote has also sent economic shockwaves through Britain as well as global financial markets. The pound has slumped to a record low against the dollar.