June 27, 2016

Brexit: Survey shows UK firms planning to freeze hiring

A significant proportion of UK employers are planning to freeze recruitment and cut investment in the wake of the EU referendum on Thursday, according to a survey from the Institute of Directors.

The IoD survey showed that 25% of business leaders plan to suspend hiring new staff due to the vote to leave the EU, while a further 5% expect to lay off existing staff.

Over a third plan to reduce investment and a fifth said they would consider moving some of their operations to other countries.

The BBC has reported that HSBC will move up to 1,000 of its London staff to Paris if the UK leaves the European single market.

Meanwhile, forecasts for the UK’s growth over the next two years have been downgraded in the wake of the referendum, with some economists now predicting the country will enter a period of recession.

The value of the British pound today fell to $1.3192, its lowest level against the US dollar since 1985.

Last week, in the run-up to the referendum, IZA World of Labor hosted a debate on the labor market implications of Brexit, with a panel consisting of economists Jonathan Portes and Alan Winters and MEP Geoffrey Van Orden, moderated by Philip Coggan of The Economist. A video of the event is available to watch online, and an audio podcast version is available on Soundcloud.

Our Editor-in-Chief, Daniel Hamermesh, has also written for us about the labor implications of the result. In his piece, Hamermesh writes: “under the best of circumstances Brexit will create a smaller UK economy, one with a labor market that is less integrated with its neighbors’ and less able to take advantage of differences in skills between it and the rest of Europe that can make both sides better off.”

Related articles:
Brexit: Implications for UK labor by Daniel S. Hamermesh
Brexit: An American politico-economic view by Daniel S. Hamermesh

Dawn or doom: The effects of Brexit on immigration, wages, and employment