UK housing and hiring bounce back after Brexit

The bounce back in Britain’s economy from the initial shock of the Brexit vote has expanded to the country’s recruitment and housing markets, according to two surveys which previously painted a bleak outlook.

The Recruitment and Employment Confederation —which last month said hiring was in “dramatic freefall” — said firms increased permanent staffing levels for the first time in three months, and were also spending more on temporary workers.

The Royal Institution of Chartered Surveyors said its monthly house price index jumped in August from July, the first rise in six months, though still one of the lowest readings in the past year and a half.

“There are clear signs that the housing market is settling down after the initial surprise of the outcome to the EU referendum,” said RICS chief economist Simon Rubinsohn.

The Bank of England’s decision to cut interest rates in August for the first since 2009 probably contributed to the brighter mood, Mr Rubinsohn added.

The recovery in the RICS and REC surveys follows a pattern set by surveys of the services and manufacturing sectors which plunged in July, when Britain was plunged into political chaos by the Brexit vote, before rising sharply in August.

Housing and retail firms also gave confident outlooks. Property website Zoopla said annual earnings would hit the top end of forecasts, confounding predictions that Brexit would freeze the market.

Housebuilders Barratt and Redrow have also sounded upbeat. Dixons Carphone, Britain’s biggest electricals and mobile phone retailer, reported better-than-expected sales and said it had seen no Brexit impact on demand.

Some economists have pulled back from forecasts of recession made in the wake of the Brexit vote, though almost all — including the Bank of England — still expect a sharp slowdown.

Bank of England governor Mark Carney said earlier this week economic growth seemed to be slowing to about half its pace from before the referendum, a slightly less severe hit than the Bank had previously predicted.

REC chief executive Kevin Green said it was too soon to draw long-term conclusions about the job market.

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