UK employers favour temporary staff over permanent as EU vote near

LONDON: British employers’ spending on temporary workers rose at the fastest pace in more than a year last month, as nerves around the upcoming European Union referendum dissuaded them from taking on permanent staff, a survey showed on Tuesday.The Recruitment and Employment Confederation’s monthly report added to evidence that British companies are delaying investment plans in the run-up to the June 23 vote on Brexit.Recruitment companies reported heightened uncertainty among their clients, in part because of the referendum, and also said a big rise in the minimum wage increased the cost of temporary staff, the Recruitment and Employment Confederation said.”Employers are turning to temps and contractors to provide a flexible resource, and also as a way of hedging any possible to change to the UK’s relationship with Europe,” REC chief executive Kevin Green said.Spending on temporary workers hired via recruitment agencies increased at the fastest pace since March 2015, while permanent staff hires rose at the weakest pace since September.Pay for temporary staff increased at the strongest rate since July 2007, which recruitment firms linked to theintroduction of a new minimum wage for those aged 25 and over.But pay growth for permanent staff eased to a three-month low. The Bank of England – which sets out its latest economicoutlook on Thursday – is keeping a close eye on earnings growth, as it assesses the risk of inflation overshooting its targetafter falling to a record low last year. However, last month it said it would be less sensitive than usual to changes in economic data around the time of the Brexitvote, which opinion poll suggest will be a close run.