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Business confidence dropped last month, according to a regular survey of companies, while firms also said they intended to hire less than they had before.
For the first time in six months the employment index from accountancy BDO dropped in July.
Businesses reduced vacancies as they were hit by higher interest rates, weak global demand and continuing supply chain difficulties.
It came as BDO’s survey also showed that businesses were more pessimistic. Its ‘optimism index’ fell for the first time in four months, BDO said.
The manufacturing sector is particularly negative at the moment, the survey found. It is particularly exposed to the highest costs of borrowing.
It follows data last week from the Purchasing Managers’ Index survey which showed that manufacturers were still particularly hard hit.
That survey found that in July the sector shrank at its fastest rate since 2020.
BDO partner Kaley Crossthwaite said: ‘A more pessimistic outlook from businesses and consequent loosening of the labour market are the first indicators of the slow in economic growth expected towards the end of the year.
‘With yet another hike in interest rates from the Bank of England last week, this downturn is only set to worsen in what should be a golden quarter for many, if more isn’t done to support businesses.
‘To reverse these trends, government needs to work more closely with industry to ensure firms of all sizes have tailored support in order to weather the storm, invest and grow.’
source: PA
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