Consumer confidence is also low under pressure, because of decades-high inflation.
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British employers are their most pessimistic about hiring and investment since the depths of the coronavirus pandemic crisis due to surging inflation and an acute shortage of workers to fill jobs, a survey showed on Wednesday.
The Recruitment & Employment Confederation's measure of confidence in hiring and making investment fell to -13 in the three months to June, the lowest since the same period in 2020 and down from -7 in the three months to May.
"This new report clearly shows the effect of rising inflation and labour shortages on businesses across the country," Neil Carberry, chief executive of the REC, said.
"While firms are still looking to bring on new staff, this is really a reflection of how difficult businesses have found it to hire so far this year," he added.
Britain's economy is under strain from an inflation rate that is heading for double digits, leaving the Bank of England in a dilemma about how aggressively it should raise interest rates at its August policy meeting next week.
Confidence among consumers has also been hit by the jump in prices with the long-running index produced by polling firm GfK stuck at a record low this month.
The REC survey was based on a telephone poll of 602 employers between April 4 and July 24.
(Writing by William Schomberg; editing by David Milliken)