UK firms scale back on hiring plans ahead of Brexit - Manpower

LONDON, March 14 (Reuters) - British employers plan to hire staff at the slowest pace in three years because of uncertainty about the country's exit from the European Union, a survey by recruiting firm Manpower showed on Tuesday. "The companies which have powered Britain's economy through the immediate post-referendum period are easing off the gas," Mark Cahill, ManpowerGroup (NYSE: MAN - news) 's UK managing director, said.

Britain's labour market remained strong in 2016 despite the shock of the Brexit vote. The unemployment rate is at its lowest level in more than 11 years although most forecasters expect it will rise this year.

Manpower said only companies in construction, manufacturing and transport and communications planned to keep their hiring levels unchanged, helped in particular in construction by the government's infrastructure and housebuilding plans.

But firms in the six other sectors covered by the survey were cutting back.

Furthermore, companies in London and Scotland, which were the areas which voted most strongly to remain in the EU, reported the biggest falls in hiring plans.

"With (Other OTC: WWTH - news) huge uncertainty surrounding sectors like banking and financial services – critical to the economy in London and Edinburgh – it's no surprise that confidence in these regions is suffering," Cahill said.

Separately on Tuesday, the British Chambers of Commerce raised its forecasts for economic growth this year to 1.4 percent, up from a previous estimate of 1.1 percent but still weaker than Britain's average growth rate.

The BCC said 2018 was shaping up to be slightly worse than it previously thought with growth edging down to 1.3 percent.

Last week, Britain's official budget forecasters said they expected the economy would grow 2 percent this year, in line with the Bank of England's estimate but stronger than most private economists expect.

The BCC said it expected business investment would contract by 0.5 percent in 2017 before growing by 0.2 and 1.0 percent in the following two years. (Writing by William Schomberg, editing by Andy Bruce)