As the Brexit is nearing (29th March 2019), many changes are being witnessed in the UK. We will soon find out what else is going to hit new lows. With economic growth and industry profit on a decline, UK future growth prospects remain depressed.
As per the latest KPMG and REC (The Recruitment & Employment Confederation) report on the job market in the UK, for the first time since mid – 2016, the number of people placed in permanent roles declined, during the January month. At the same time, staff demand was also the lowest in more than two years.
Mark Carney, Governor – Bank of England (BOE), said that Brexit’s fog is creating a series of tensions in the UK while making economic data highly volatile. BOE’s forecast on Britain’s economic growth target for the year 2019 was the lowest in the last ten years. BOE blamed Brexit issue and the global economic slowdown for this. He added that while many companies are planning for what to do in case of a no-deal Brexit, the economy is not prepared comprehensively to digest its repercussions.
BOE slashed its previous estimate on economic growth forecast to 1.2 per cent, down from early forecast of 1.7 per cent.
Since the businesses are not clear about what lies for them in the immediate future, they are just playing safe, planning for possible outcomes but holding onto the expansion. It is trickling down on the jobs market as well.
The REC report found that the salaries rose fastest in the last three months, especially the starting salary to the newly appointed staff at permanent positions. The wage-growth which was faster than expected during the latter part of last year, forced BOE to trim its wage forecast from 3.25 to 3 per cent at the end of this year.
There was a trend-reversal in some parts of Britain. Merseyside and South Yorkshire saw an increase in the job market. The jobs at these places grew at the highest levels, since the 2008 financial crisis. It has been seen that areas with low-income households have seen a growth in jobs growth. The national employment rate of more than 75 per cent in Britain mostly saw low-employment areas ‘catching-up’ with the rest of the UK over the past decade. Wages grew at 3.4 per cent in three months to Nov 18, the quickest growth rate seen in more than ten years.
Neil Carberry, REC chief, said that survey must have conveyed a strong message to the politicians in Westminster and Brussels with respect to the clarity that is required to run a business, making them confident with their investments.
The Report also showed that the availability of workers also declined for joining new roles. It was primarily because of high employment levels in the UK and workers not confident to switch due to Brexit uncertainties. They feel safer to stay put. Overall, Brexit scenario is impacting many sectors and it will be a close watch on how things turn out in the next 2 months.
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