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Tuesday, September 13, 2016

How is Brexit impacting on the jobs market?

Today's news is dominated by the David Cameron's resignation as an MP, the Parliamentary boundary changes and of course the defection of the Great British Bake Off to Channel Four. However, the real news remains with the Government's plans to put the referendum vote into effect by leaving the EU and its impact on the UK economy.

The Guardian says that a new report by recruitment agency Manpower has concluded that Britain’s employers have refused to panic following the referendum vote, but new jobs are likely to become increasingly scarce as concerns over Brexit talks undermine business confidence.

Official figures show employment is steady and the number of people claiming jobseeker’s allowance is falling but Manpower say the UK jobs market is “skating on thin ice”, with cracks starting to appear in many areas of the economy:

A survey of more than 2,100 employers showed that companies in business and financial services, construction and utilities were less optimistic than before the referendum, while prospects also fell in manufacturing.

Employers in several sectors said they were concerned that key staff would be affected by a block on EU workers staying in the UK.

The survey chimes with a raft of similar reports showing that employers are nervous about Brexit negotiations that could see the UK leave the single market and impose strict limits on EU workers coming to Britain.

The ratings agency Standard & Poor’s said signs of a post-referendum recovery should be treated with caution because a rebound in August only made up for ground lost in July.

“While the news is encouraging, we believe it has no bearing on the cloudy longer-term outlook for the UK economy,” said Sophie Tahiri, an economist at S and P Global Ratings.

An expansion over the next few months could be viewed as the economy returning to “business as usual”, but this may prove to be premature or even a mirage, she said.

“The uncertainty surrounding the UK’s future outside of the EU – and the associated economic risks, which we think are pronounced and predominantly skewed to the downside – will gradually take its toll, particularly on investment, as businesses start dealing with the new Brexit reality,” Tahiri said.

The UK Managing Director of Manpower, Mark Cahill says that employers are reliant on European talent to help fill skills shortages, especially in IT and the City. He believes that financial centres in the EU are circling financial institutions in the City to steal work and skilled staff. There has been an 800% increase in applications for finance positions in Dublin since the EU referendum.

In addition many employers in the health service and care sector also rely on foreign workers from the EU and were concerned about filling skills gaps.

None of this looks very promising. Perhaps we are going to need the Great British Bake Off to cheer us all up.
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