U.K. Firms Add Workers as Confidence Returns to Pre-Brexit Level

  • Companies more optimistic about one-year economic outlook
  • Report shows ‘solid growth’ in pay for permanent employees

Confidence among U.K. businesses has returned close to its level before the decision to leave the European Union, with companies feeling more optimistic about the economy.

An index by YouGov and the Centre for Economics and Business Research increased to 112.4 in September from 109.7 a month earlier, they said in London on Friday. The gauge was at 112.6 in June and 112.5 in May. The percentage of businesses in the survey feeling upbeat about the economy over the coming year rose to 44 percent from 35 percent in August.

Separately, IHS Markit and REC said their monthly employment report showed a moderate increase in permanent placements in September. There was “solid growth” in salaries for permanent jobs, though for temporary roles it was at its weakest in 40 months.

The improved outlook for the economy follows better than expected reports in recent weeks that suggest the U.K. is weathering the shock of the Brexit referendum. Sentiment among consumers has also improved and the Bank of England has acknowledged that near-term growth will be stronger than it previously forecast. Some policy makers have also suggested they may raise their growth forecasts next month.

“It’s now clear that business confidence took a short-term stumble in the wake of the EU vote instead of a long-term fall,” said CEBR Director Scott Corfe. “The panic that gripped businesses in the aftermath of the referendum has subsided and they are now much more level-headed and optimistic.”

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