Employee confidence in UK business conditions was at its lowest in two years during the third quarter, according to Gartner Inc.’s Global Talent Monitor report.

Its index measuring business confidence fell to a reading of 45.2 in the third quarter from 60.1 in the third quarter of 2018.

“In the buildup to the October 31 Brexit deadline, businesses spent 3Q19 focused on preparing for a no-deal scenario, stockpiling inventory, and making efforts to reassure employees around different Brexit eventualities,” said Brian Kropp, chief of research for the Gartner HR practice. “This was at the cost of important employee development initiatives such as training, appraisals and team building.”

Gartner also found nearly 42% of employees reported a high likelihood of staying with their organizations compared to a year ago when only a quarter of employees were likely to remain. In addition, active job-seeking behavior fell to 36% in the third quarter from 51% a year ago.

“Organizations are wrestling with the question of how to balance the running of day-to-day business operations against preparing for ongoing Brexit uncertainty, such as, ‘What will companies do if Brexit deadline extensions continue during the course of 2020 and beyond?’”  Kropp said. “The situation is not sustainable, and the UK labor market will continue to suffer until we see some political stability.”