By Navdeep Yadav and Bella Barber
LONDON (Reuters) - British employers and shoppers are turning increasingly cautious, indicators showed on Friday, suggesting two of the drivers of the economy during the Brexit crisis are losing momentum.
In a week when business surveys pointed to a contraction in overall output in the second quarter, the latest signals from Britain's boardrooms and high streets underscored the extent of the slowdown following a strong start to 2019.
That was when many companies were rushing to prepare for the original Brexit deadline in March.
The latest figures showed that the subsequent slowdown in the economy was not just payback for the stockpiling surge.
The number of people hired for permanent jobs via recruitment firms in Britain fell for a fourth month in a row in June, recruitment industry group REC said on Friday.
The figures represented a stark contrast to the robust hiring activity in 2018.
"Brexit stagnation continues to seize up the jobs market as the slowdown in recruitment activity continues," said James Stewart, vice chair at KPMG which produces the report with REC.
For temporary staff, hiring rose marginally in June, marking the weakest patch of growth since May 2013, when Britain's economy began to emerge from the after-effects of the global financial crisis.
Britain's labor market has been one of the strengths of the economy since the 2016 Brexit referendum.
Unemployment fell to its lowest rate since 1975 at 3.8% in the first quarter of 2019, according to official data.
Many economists have linked the jobs boom to uncertainty about Brexit which has made employers favor hiring workers -- who can be laid off quickly -- over the longer-term commitment of investing in equipment.
But the jobs surge has put more money into people's pockets which had driven consumer spending, offsetting a fall in investment by many companies.
Data on Friday showed Britain's high street retailers had a "washout" June, however, as shoppers did not respond to early summer sales discounts.
"We saw retailers discount early on in June, adding further pressure to tight margins, yet they still weren’t able to salvage the month," said Sophie Michael, head of retail at BDO, an accountancy and business advisory firm.
The survey chimed with another weak reading of retail sales published last week.
The Bank of England has said Britain's economy probably had zero growth in the April-June period, contrasting with growth of 0.5% in the first three months of 2019.
BoE Governor Mark Carney warned on Tuesday that the prospect of a no-deal Brexit and the rise in protectionist trade policies around the world, led by U.S. President Donald Trump, posed growing risks to the British economy.
Surveys published this week of Britain's manufacturing, construction and services sectors suggested the economy contracted by 0.1% in the second quarter.
That would be the first fall in gross domestic product since the end of 2012.
A survey published by an employers group showed British businesses turned gloomier, bucking an improvement in sentiment earlier this year.