A report on jobs, by IHS Markit, shows that for the second month running the number of people securing a permanent postion has fallen.
HIS Markit collect data from 400 UK recruitment and employment firms.
The report suggests that permanent placements in July fell at the sharpest rate since May 2009, with participants citing uncertainty caused by Brexit.
The results also shows that businesses are beginning to use short term staff due to the uncertainty in the market.
“The UK jobs market suffered a dramatic freefall in July, with permanent hiring dropping to levels not seen since the recession of 2009,” said Kevin Green, the chief executive of the Recruitment and Employment Confederation (REC), which sponsors the survey.
However, Mr Green said it was important not to jump to conclusions from one month’s data.
“The truth is we don’t know what long term consequences the referendum result will have on UK jobs. With the political situation becoming more stable and the Bank of England making sensible decisions, we may well see confidence return to the jobs market more quickly than anticipated,” he said.
However there is still high demand for staff in many business sectors and that salaries had increased in July.
“Demand for staff remains strong with vacancies continuing to rise, but the sharp fall in placements suggests that businesses are highly cautious about committing to new hires,” said Mr Green.
“Economic turbulence following the vote to leave the EU is undoubtedly the root cause.”