[LONDON] Hiring in London's financial industry dropped sharply and companies are keeping a tighter lid on costs following the UK's vote to leave the European Union, according to Hays Plc Chief Financial Officer Paul Venables.
"Business loves the magic wand called certainty and we have none of that now," the executive at the UK recruitment company said in an interview Tuesday with Bloomberg TV. The drop in the pound "is a sign of the uncertainty."
Mr Venables was speaking after Hays reported quarterly earnings through the end of September that included a 10 per cent drop in comparable fees earned in the UK and Ireland, with a 17 per cent fall in London. This compared with a 13 per cent rise in the rest of the world excluding the Asia-Pacific region, punctuated by gains in France and Germany of 22 per cent and 12 per cent respectively, the company said in a statement.
Following a slowdown after the June 23 Brexit referendum, UK companies returned to hiring in September for projects that are under way, Mr Venables said in the interview. While plans haven't been canceled, there is "much more caution on new capital investments."
The UK makes up more than a quarter of the company's business. Recruiters like Hays and Adecco SA of Switzerland are seen as economic bellwethers as companies use their services to bring in temporary staff when prospects are rising.
The "eye of the storm" on Brexit has passed, the Hays CFO said, adding that uncertainty lingers about the types of trade deals the UK will be able to work out with the European Union and other blocs.