A leading West Midlands business expert has warned that zero-hours contracts could be stifling the UK economy following a survey that revealed one-in-four firms used the flexible working arrangement.

Research by the Recruitment and Employment Confederation of 600 employers found a quarter of employers used the system, which did not guarantee work patterns for employees.

Kim Hoque, a professor of human resource management at Warwick Business School, said: “Zero-hours contracts could represent a drag on consumer spending and economic recovery.

"People on insecure zero-hours contracts are less likely to have the confidence to spend than people with more stable incomes.”

The business expert said he believed more research was needed on the far-reaching effects of the contracts.

“From the employer’s point of view zero-hours contracts provide ultimate labour flexibility, enabling them to keep costs down by matching staffing to demand,” he continued.

“While this clearly has significant cost saving potential in the short-term, it is difficult to see how businesses can build motivated workforces.

"The growth of such contracts is testimony to the extent to which employers have focused more in recent times on squeezing the wage bill rather than responding to attempts to encourage them to seek greater employee engagement."