A reduction in government funding that enables UK students to study abroad could damage the economy by reducing language skills, according to a recruitment specialist.

Euro London Appointments said it has witnessed a decline in fluency levels in graduates over the past five years; a decline it attributes to the reduction in study abroad programmes.

The firm is concerned that preventing students from studying abroad by cutting funding — combined with few compulsory language classes in schools — could damage UK businesses by reducing the capacity of the workforce to communicate with those from aboard.

Eileen Sudmann from Euro London Appointments said: "Increasing costs and debt mean that many students aren’t willing or financially able to take advantage of the experience. The UK needs to try and preserve the year abroad if it wants to remain competitive."