Next CEO Lord Wolfson tells BBC ‘this is not the Brexit I wanted’ – business live | Business

UK firms have cut back on hiring new workers for the first time since the pandemic lockdowns in February 2021, as they struggled to find staff.

Permanent placements dropped in October, the first decline in 20 months, according to the latest UK Report on Jobs from KPMG and REC.

It found that heightened economic uncertainty had led some clients to reassess their recruitment plans.

But candidate shortages also dampened hiring – which backs up Simon Wolfson’s call for more foreign workers to be allowed in.

The report says that the number of candidates available fell again last month, with reruiters pointing to the lack of overseas workers:

The decline in permanent staff availability remained more acute than that seen for temporary labour.

When explaining the latest drop in candidate numbers, recruiters commented that people had become more reluctant to switch or seek out new roles due to concerns around the weaker economic outlook, fewer foreign workers and a low unemployment rate.

The report also found that starting salary inflation slipped to 18-month low, as the jobs market cooled. That might allay the Bank of England’s fears that a wage-price spiral could break out.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Brexit means Brexit, as the prime minister-but-three would once insist. And six years after the referendum, Brexit means UK companies are strugging to hire workers.

It’s so bad that the boss of high street chain Next is calling on the government to allow more foreign workers into the UK, to help address chronic labour shortages that are hurting the economy.

Simon Wolfson, who was one of the most prominent business leaders backing the UK leaving the European Union, now fears the UK’s current immigration policy is crippling economic growth.

In an interview with the BBC, Lord Wolfson said that blocking foreign workers has a considerable cost to the UK economy.

He points out:

“We have got people queuing up to come to this country to pick crops that are rotting in fields, to work in warehouses that otherwise wouldn’t be operable, and we’re not letting them in.

“And we have to take a different approach to economically productive migration.”

Wolfson admits that this is not the Brexit that he – or most people – wanted, saying:

“I think in respect of immigration, it’s definitely not the Brexit that I wanted, or indeed, many of people who voted Brexit, but more importantly, the vast majority of the country,” he said.

“And we have to remember, you know, we’re all stuck in this Brexit argument, we have to remember that what post-Brexit Britain looks like, is not the preserve of those people that voted Brexit, it’s for all of us to decide.”

Back in 2016, Wolfson had a much cheerier view, declaring that “On balance, I think we will be better off out”, and that without radical change the UK was “heading for a long era of low growth”.

But now, the UK is facing its longest recession in decades, while the rise in long-term sickness pushed vacancies to record levels earlier this year.

Next itself has now issued two profit warnings this year, as soaring inflation and the weak pound undermined consumer confidence.

Sectors across the economy are find it hard to recruit, including hospitals, pubs and restaurants, and logistics companies. Last year, lorry drivers and poultry workers were offered temporary UK visas to help fix the supply chain crisis.

Government ministers have previously criticised businesses for hiring staff from overseas on lower salaries, undercutting domestic workers.

Wolfson’s solution? Businesses who need foreign workers should pay a tax of 10% to the government on those salaries – to incentivise them to look at home first.

As he tells the BBC:

“It would automatically mean that businesses never bought someone into the company from outside if they could find someone in the UK.

But if they genuinely can’t, they’ll pay the premium.”

Also coming up today

The cryptocurrency market is in turmoil, as the crisis gripping crypto exchange FTX deepens.

Overnight, rival Binance has backed out of a deal to rescue FTX, citing investigations by US financial regulators and concerns about its business practices.

FTX’s founder, Sam Bankman-Fried, has reportedly told investors that FTX needs funding of up to $8bn after a surge in withdrawal requests from customers.

Investors are bracing for today’s US inflation report, hoping it will show that price pressures cooled last month.

The annual CPI rate of inflation is expected to drop to 8% for October, from 8.2%.

A slowdown in inflation could encourage the US Federal Reserve to slow its interest rate rises.

But as Michael Hewson of CMC Markets explains, core inflation is the key to the Fed’s next moves:

Core prices are the main focus and they accelerated in September, pushing up to a 40 year high of 6.6%, and they’ve been sticky all year.

Markets will be looking for evidence of a slowdown here if the narrative of slowing inflation is to take hold. The rise in the US dollar does offer cause for optimism, given it acts as a brake on higher prices. Today we’ll find out whether core prices are giving any indication of slowing down.

We’ll also hear from Bank of England monetary policy committee member Silvana Tenreyro, who is giving the keynote speech at the Society of Professional Economists Annual Conference.

The agenda

• 8am GMT:: China’s new yuan loans for October

• 1.10pm GMT: Bank of England policymaker Silvana Tenreyro gives keynote speech at the Society of Professional Economists Annual Conference

• 1.30pm GMT: US inflation report for October

• 1.30pm GMT: US weekly jobless report