Uncertainty surrounding Brexit is beginning to stifle the UK's previously resilient jobs market as businesses reduce their plans to hire new staff, according to business advisors BDO LLP.

Although the number of people in employment reached a new record high between October and December, BDO's Employment Index, which tracks hiring intentions for the next six months, fell for the second month in a row in February.

It follows a recent spell of employers, particularly in the car industry, announcing job cuts and decisions to pull production from UK factories.

Business confidence, also measured by BDO, also fell in February for a seventh consecutive month and hit its lowest point since December 2016 at 99.79. The study found that the manufacturing industry was hardest hit by the decline in confidence.

The BDO also said output in the services sector saw an increase in February, helping to prop up the UK's overall output. However, it remains well below the long-running average. And manufacturing performed particularly poorly, "mirroring the weak performance observed across advanced economies", the BDO said.

Peter Hemington, a partner at BDO LLP, said: "The bright spot of Britain's low investment, low growth economy in recent years has been its flexible labour market. This has been Europe's jobs creation machine, sucking in workers from all over the continent. Unfortunately, the uncertainty created by Brexit is bringing this trend to a halt, with hiring intentions sharply down over the last two months.

"Once the Brexit chaos is resolved, we need to decide as a country what sort of economy we want to have. But, in almost any scenario, we need to see higher levels of investment by companies to ensure that a smaller number of employees are more effective as they go about their work. This will require thought, leadership and decisive action from the government."