The number of people in permanent work fell by its sharpest amount since the recession in July, it was revealed this morning.

Pay rises have also ground to a halt and even the rise of temporary workers stuttered in the first full month after the referendum, the latest report on jobs from Markit and the Recruitment and Employment Confederation (REC) has revealed.

The poll of recruiters found 38 per cent said they had found work for fewer people in July than in the month before, up from 32 per cent in July.

The fall in permanent employment was the second consecutive monthly decline, with most employers stating "Brexit-related uncertainty" was the reason why their workforces had shrunk.

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The capital suffered the slowdown worse than anywhere else in the country, the report found.

Kevin Green, chief executive of the REC said: "The UK jobs market suffered a dramatic freefall in July… The fall in placements suggests that businesses are highly cautious about committing to new hires. Economic turbulence following the vote to leave the EU is undoubtedly the root cause."

Yesterday the Bank of England forecast unemployment will rise to 5.6 per cent over the next few years – an estimated 250,000 more people out of work than would have been the case had the UK stayed in the European Union. Governor Mark Carney said this number would have been even higher were it not for the Bank's mega-stimulus package unveiled yesterday.